There is a saying that ”Cash is King”. For those people who have cash, Columbia SC Real Estate can be a very good investment. I am seeing investors loaning money for 1st mortgages at 12-15% on secured 1st lien positions with a low loan to value position. An example would be a loan of $50,000 to a homeowner needing cash on their paid up home valued at $225,000. The homeowner who has credit issues pays monthly interest of $500 on a two-year note with the house as collateral. That is a very good return with the house as security. If the seller defaults the investor gets the house. If the payments are paid timely everyone is happy with the deal.

Before entering such an agreement make sure the value of the house is there via a Realtor market analysis or an appraisal. Make sure that the seller has title and there are no liens on the property. It is important to have insurance as a prerequisite for the deal with all closing costs being paid by the Homeowner. Of course you want an attorney to close the deal with title insurance protecting you and a survey. It is best that you physically go to the house to check out the condition and location to determine what the house is about. I don’t suggest doing blind deals. Next you want to find out the financial capability of the Homeowner to determine the likelihood of their servicing the debt. People have credit challenges for a variety of reasons and getting loans from banks are much more difficult today.

Also, consider a Columbia SC Rent To Own scenairo or Columbia SC Lease Option.  A good place to advertise to secure these types of loans is on the Internet. Craig’s list is one venue to put an ad under Real Estate loans. State your terms specifically to attract those people that you find most desirable. There are many people looking to borrow and fewer investors to lend. You are in the drivers seat and can dictate the terms you feel most comfortable with.

As far as tax consequences, interest income is not subject to social security. Depending on when you structure the deal you can even have balloon payments at a certain time, or in intervals reducing the principal and risk. I strongly advise always having a first lien position to avoid possible foreclosures and getting shut out at the closing table.