Real estate is an industry with a lot of opportunities. In recent times, it has been able to secure a distinct position as one of the most favored investment options. This is mainly due to the fact that apart from reaping high dividends, real estate is also one of the most secure forms of investment. Real estate prices rarely go down. Due to these reasons, real estate happens to be the current favorite among investors.
As we see a rise in a number of real estate investors, with big budgets ride the real estate tide, smaller investors to refuse to be left behind. This paved way for many financial institutions, offering loans for the purpose of real estate investments. The rise in competition also forced these financial institutions to provide loans on extremely low rates of interests.
However this was not the end, as more and more people began pondering over the thought of investing in real estate, a new term was coined, i.e. creative financing. Creative financing is one of the most important techniques in real estate investment.
As a matter of fact, creative financing is an area with many possibilities. As of now, there are basically two ways of creative financing. Creative financing is often done to save foreclosures.
As discussed earlier, there are basically, two modes of financing in creative financing:
In the first method, the buyer takes over property, along with the sellers responsibility of paying the monthly repayment, or in other words, the buyer takes over the sellers mortgage. The buyer also keeps the deed of the property along with the promise to return it if he fails to make repayments on the mortgage on time. This is quite common in cases where the seller is unable to pay for his repayment.
In the second method, the buyer pays off the seller in the form of another mortgage, in return for the hold in his property, with the promise of disposing of the first and the second mortgage.
Real estate returns are a great investment option, for anyone, especially for those who are looking for long term return on their investments. If we look at the economy of the United States, we would find real estate sector beaming with confidence. As a result, investing is booming; which guarantees not just a great rate of return but an extremely low level of risk.
It is a well known fact that land always appreciates in value and that is why many investors are pulling their money out of the stock market and placing into real estate and Creative financing is an important addition to the world of real estate.