I am looking to invest in real estate and I have come accross this company that will sell me a lot in a North Carolina Inner Coastal Waterway Community with around 10% worth of equity and no out of pocket exspenses and they also give me 24 months of payments at closing?
Anyone ever hear of this?
It sounds like the folks that were peddling swamp land in Florida :
I have seen the appraisals and they have 10% equity and I have checked the re sells in the area and they are comping out in line? Should I be weary?
you could be over paying for the property…appraised value is different from the market value…if you buy a home that is appraised for $100,000 that is for sale for $90,000…yeah you might have $10,000 in equity but the market value might only be $70,000…which means that you just overpaid $20,000 for your property and then they give you cash back incentives… Lots of people in the south are doing this and most buyers are out of state investors…offering cash back incentive or no mortgage payments for 2- 4 years…i know you said that the comps are good but just be careful…it might be a good idea if you plan on holding the property for a long time but not if you are going to sell within the next few years because you might take a loss at selling…
Financial incentives to attract buyers is not done out the goodness of their hearts. There is a payback somewhere in the process and it is most likely in the sale price being above market value.