Homebuyers are motivated by a dream

It is the dream of every North American to own a home someday.

We are specifically talking about homebuyers who applied for mortgages but were rejected.

They may even have tried to get a mortgage for "people with bad credit" -- and were still declined.

What about those who did not even try to apply, because they don't believe they could get a mortgage.

These homebuyers want to switch from throwing away their hard earned money on rent to building equity in their own home.

There are several important factors that motivate these homebuyers to get them to make the transition from rental to home ownership:

1) Pride of ownership.

2) Knowing that nobody can ask them to leave and sell the house from under them.

3) The opportunity to remodel the house to their liking.

4) The opportunity to tell their friends and relatives 'they bought a house'.

These homebuyers are concerned with both price and payments, but mostly to the extent as to whether or not they can afford the payments and ultimately qualify for a mortgage.

The most important thing for them is the fact they can buy and own the home now.

Therefore, our job as smart real estate investors is to offer these homebuyers the opportunity of home ownership with owner financing

Owner financing is an item in low supply and a relatively high demand.

Profiting From Financing

When you help homebuyers with finance who can't get a mortgage on their own to get into a home you get to make a good profit.

Why?

Because, as I mentioned before, when you are providing a commodity in scarce supply you can ask and receive a premium on the price and payments.

Is this fair deal for all parties? Absolutely.

You are offering the homebuyers the opportunity that doesn't exist for them otherwise.

The only other choice they have is to wait until their credit situation changes and until they save enough money for a down payment.

This alternative is actually much more expensive for them than doing business with you.

Waiting and saving could easily take them 3-4 years.

In an area with growing housing prices it means they could be paying $30-50,000 more for the same house you can sell them cheaper today.

Ultimately they will likely be paying escalating rents during those 3-4 years it takes them to get to the point of being able to qualify for a mortgage.