What Is the Future for Real Estate in Mexico - Doom and Gloom? (May 2011)

by Enrique (Henry) Saldana
   
Sales are down, rentals are slow, inventories are high, banks are toughening their lending requirements, consumer confidence is low, and these are just some of the present scenarios the real estate industry in Mexico is facing today.

The boom real estate years of 2003, 2004, 2005, and even 2006 are not coming back in the foreseeable future. Selling real estate in this decadeand beyondwill require new techniques, different knowledge and new approaches. That means buyers, sellers and real estate agents will need to adjust to the times in order to succeed. They will need to learn how to apply creative selling techniques.

The key to selling real estate in this market is going to be KNOWLEDGE ... correct information, knowing how to do it, avoiding all scams.  And one more thing... YOU are going to have to EDUCATE yourself in what we call CREATIVE FINANCING!

What Is Creative Financing?

Creative financing is any financing arranged other than through a lending  institution. Creative financing can include loans from the seller, balloon payment loans, wrap-around mortgages, and land contracts, among other forms of legal financing (anything other than making the standard down payment and getting a loan from the bank).

Creative Financing, also known as "owner financing" or "seller financing," is common in a buyer's market. It actually means that in order to allow for the sale of a property, property owners are willing to provide creative financing terms and conditions in a Buyer's Market real estate cycle. The deed to the property is usually not transferred to the buyer until all of the payments have been made but, because no institutional lenders are involved, the overall terms of financing are much more negotiable and can be set up to provide benefits to both the seller and the buyer. The buyer saves on points and closing costs, while the seller can obtain monthly cash flows that provide a better return than fixed-income investments

We're talking about:
Owner financing, Rent to own, Lease options, Contract of sale, Contract for deed, Land trusts, and other Creative Techniques

Here is an example:

A Seller owns a couple of properties, one is free and clear and the other has a small mortgage. He needs to free himself of the mortgage payment liability on the second property to reinvest his money on a new investment venture.  The Owner decides to do Owner Financing on the free and clear property to allow for the cash flow required to make the mortgage payment on the second property, or mortgaged property. This releases his cash flow liability and allows him to reinvest. It also allows him to secure the sale of the property in a "tough" real estate market cycle. Creative financing can be applied in many different "creative" ways, thus the name. And the proper application of these creative financing techniques and principles can accommodate almost any financing need.


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Article courtesy of: act4success@hotmail.com www.act4successconsulting.com
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