Knowledge may be power, but with vendor takebacks and other forms of seller-based financing, a good relationships may be what really saves you. CREW reports.
Video transcript below:
Jemima Codrington: Investors are always on a hunt for a great deal and that equivalent comes to financing.
We catch with the experts on the ever popular but sometimes risky Vendor Take-Backs in this week’s Investor Insight of Crew TV.
"Knowledge is power and the VTB mortgage is no exception"
According to industry experts there are two primary things to keep in mind when considering taking out a Vendor Take-Back loan.
Dalia Barsoum, Senior Lender Advisor, Centum
Vendor Take-back is another great financing tool for you as an investor because it allows you to buy a rental property with less down. Having said that, there are a couple of things you need to keep in mind.
Number one is you need to seek legal advice, because although it’s sound for your realtor, you really need your lawyer to review the document.
Number two, you need to think of your exit strategy when it comes to getting that loan. God forbid if the lender passes away or they go bankrupt what’s going to happen.
Matthew Tynan, Real Estate Investor
A Vendor Take-back mortgage is tricky. You could have a really good lawyer, if people need to understand all about this, the mortgage and the ins and outs of the pros.
You need to also know that the seller, you need to get to know the seller almost on a personal basis, because he is, the seller’s going to be your banker, your mortgage holder. So you really have to have a good confidence, a good rapport with your seller, we also do a Vendor take-back mortgage.