Being a property owner has been a fundamental goal of Americans since the country was founded in 1776. Even though there has been great progress to help all Americans achieve the dream of homeownership, the recent past has nearly destroyed the dream for many.

Nearly 6 million property owners have had their house repossessed because of foreclosure. Although the number of foreclosure filings declined in 2011, industry experts believe that 2012 will experience another round of foreclosures that could cause another 2 million homeowners to lose their property.

If the real estate experts are correct, home values will likely further decline. This can bring about an increase in the number of people that decide to attempt strategic foreclosure. This strategy has been covered on the news lately because it is very controversial.

Not so long ago, strategic default was a tactic used primarily by people with pristine credit scores that allow them to recover rapidly even from events like foreclosure. Homeowners can afford to pay their loan installments, but they choose to quit paying in effort to make their lender negotiate a better rate on their loan or repossess their house.

Banks usually don\’t offer loan modifications or other kinds of mortgage foreclosure options to property owners that aren\’t having financial difficulties. For this reason, homeowners that can afford to pay decide to walk away instead of paying for property that is not worth the balance of the outstanding loan.

While most people have a negative view of the real estate market, optimists are discovering ways to capitalize on the current situation. Savvy real estate investors understand that the millions of homeowners displaced by foreclosure need a place to live. A lot of these investors are buying houses to offer as rental properties to people that have lost their house to foreclosure.

Most people would consider this to be a risky maneuver. After all, if homeowners didn\’t pay their mortgage payments why would they pay rent? Certainly, real estate investors need to conduct due diligence to ensure tenants can meet rental obligations. But, contrary to popular belief foreclosed homeowners often times make the best tenants.

Better yet, a lot of people really want to buy another house, but won\’t qualify for bank financing for a couple years after foreclosure. In many cases, they have no other option than to become tenants while trying to improve their FICO score.

One technique investors use to boost cash flow is to sell houses using unconventional financing methods. A few of the more well-known include: lease to own purchase agreements, subject to, seller carry back mortgages, and take over payments.

Each technique requires investors to execute legally binding documents that record the purchase terms. It is always recommended to hire a real estate lawyer to write up sales contracts and file documents with appropriate agencies.

Lease to own purchase agreements are a good option for people that don\’t have a large down payment. This strategy allows the buyer to live in the house as a tenant while buying the house. Buyers are required to provide the seller with a down payment and a percentage of rent money is applied toward the purchase price.

Take over payments allows buyers to take over the remaining mortgage installments using the seller\’s credit rating. Careful consideration is required when using this kind of agreement. Nearly all mortgage deeds have a clause that states borrowers have to pay off the loan balance if the house is transferred or sold.

Subject to contracts assign property rights to the buyer in exchange for paying future loan installments. The mortgage note remains in the seller\’s name until the buyer obtains bank financing in his own name.

Seller carry back mortgages require property owners to provide all or part of financing. Seller carry back is nearly identical to bank financing because it requires buyers to enter into a legal contract with the seller.

If buyers default the seller can repossess the property. Seller carry back transactions typically only last for a few years, then buyers have to obtain a bank loan or pay the balance in cash.

Discover more ways to buy property after foreclosure from Simon Volkov, a California real estate investor. He offers a wide variety of real estate articles along with tips for buying houses and investment properties at www.SimonVolkov.com.

Discover more ways to buy property after foreclosure from Simon Volkov, a California real estate investor. He offers a wide variety of real estate articles along with tips for buying houses and investment properties at http://www.SimonVolkov.com.

Author Bio: Discover more ways to buy property after foreclosure from Simon Volkov, a California real estate investor. He offers a wide variety of real estate articles along with tips for buying houses and investment properties at www.SimonVolkov.com.

Category: Real Estate
Keywords: property,seller carry back mortgages,take over payments,subject to,lease to own purchase agreements