Mortgage Denied: The New Norm?

How CoronaVirus related Unemployment will impact Real Estate
and how are Proxima Investors going to offer solutions

Widespread unemployment applications are just the tip of the iceberg. Soon a large part of the workforce will not meet the requirements for a mortgage and it will get even worse as lenders tighten the rules. In this environment, we can help real estate transactions happen by using our everyday tools.

We’ve been helping homeowners sell, homebuyers buy and renters step on the property ladder and achieve the very american dream of home ownership for years. Agents and Brokers are going to be facing huge challenges getting listings that are going to sell and finding buyers who can secure the funds by obtaining a mortgage, to represent. Again, we have the tools to help brokers’ and agents’ clients sell their homes at great terms and assist buyers in becoming viable takers.

We don’t provide services, we cooperate with agents and brokers so they can help us get deals done. We guarantee the hard earned fees and establish a steady professional relationship that can bring more and more deals despite the challenging times.

We are Investors on Terms. We are not agents or brokers, we are not wholesalers or rehabbers, we are not landlords or buy & hold investors. We pay full fair market value and are transparent. We are A+ Better Business Bureau accredited and operating in real estate investments for decades.

Most are greatly surprised by the amount and type of options that we can present to overcome challenges that are not uncommon, like stale listings, quirky homes, failed inspections, high asking price, deferred maintenance and will soon be the new norm.

Buyers who won’t be able to buy because of the lending industry’s extremely tough requirements. They got tougher in 2008, and now, for a number of reasons including lack of capital and low interest rates, they will get tougher. Additionally, the job market is going to be impacted and revolutionized.

The bottomline is very few successful mortgage loan applications.

That’s why you should look into partnering with us to get real estate business done!

The first step is to contact us, schedule an introductory call or remote meeting. We can meet, get to know each other enough to then quickly find out if we can help.

If you’re in the minority who cannot be helped with our standard methods, we may still be able to help otherwise.

Our only limits are the prevailing laws of the moment at federal, state and local level, ethics, since we embrace the ethical purpose that we gave to our business model from the beginning, and of course, practical convenience, as all deals need to be put into the perspective of a business transaction.

Contact Us in a timely fashion to get on top of the real estate market of the near future.

Call or Text 617.921.9265 anytime to reach out.

We look forward to meeting new homeowners, renters, professionals and anybody involved in real estate and that we can assist to achieve their goals!

Job Losses and the CoronaVirus

How will job and income loss affect the Real Estate Market

Job losses and income reduction are already happening in most of the economy

Job losses and loss of income in general are scary, but they’re real and they’re happening all across the board. In the meantime, there are companies which are hiring, rather than firing.
E-commerce, delivery, shipping and trucking, healthcare of course, grocery stores and those involved in producing and supplying essential goods and others.

Aftermath

When the dust settles, jobs are going to be coming back, surely shuffling around with many career restarts and change of positions. Most jobs will likely be absorbed by a resurgent economy.

The Residential Real Estate Market
Some businesses are hiring and may absorb some redundancies, in the short term and, in part, in the longer term

In Real Estate this means that many who want or need to buy a home, will have to figure out how to fund a purchase without qualifying for a traditional mortgage for insufficient employment history.
Additionally, if they had reserves and burned through them to get by during these tough times, mortgages requiring a significant downpayment may be out of reach.
Even the modest downpayment requirements of 3.5% of an FHA loan may be tough to meet, especially when it’s on top of all the other criteria of eligibility.

Impact on HomeBuyer Activity

Will this impact the ability to sell? Will the pool of buyers who not only want to buy, but also are able to buy, dry up significantly?
It’s always a matter of price, if the price is appealing enough, then there will always be a buyer.
There may be many more cash investors who are already setting cash aside and quickly liquidating assets, including on the stock market, but soon also bonds, to take advantage of a difficult situation for sellers.

Cash Buyers
Businesses are forced to layoff or furlough

They buy at a discount and never at a premium, so sellers who need to sell may have to take a hit. Not ideal. It may work in extreme circumstances where the property is in physical distress and/or the seller is under intense pressure to dispose of the home and the selling price is not the main priority.

Rental

However, there are other options that sellers can entertain, including renting. It could mean income that could cover carrying costs until the market restores to better values, but they would have to be landlords. For good reason, many don’t want to be involved in rentals, nor do we.
Alternatively, they can sell in one of the many more ways that the law and the market allow.
That’s when we come into play, as investors on terms.

Proxima Investors are Residential Real Estate Investors on Terms
Investors on Terms

We use any method which federal, state and local laws and regulations allow to achieve the sellers’ goals by buying the property at full or close to market value.
At the same time we sell the same property primarily on a lease-option or owner financing deal. We therefore allow time for the buyer to get in position to obtain a traditional mortgage or any other way of financing the formal purchase; or we may finance them.

Opportunity for Sellers


Sellers relinquish all responsibilities and headaches from carrying the property to us, they don’t have to sell at a discount and get it done with professionals like us involved. They can move on without any burdensome debt which hits hard month after month. They will have no more worries or miss out on market opportunities.

If sellers want a head start in this fluid market they should get in touch and find out about the details.

Real Estate Agents & Brokers

Agents are also encouraged to reach out and get accustomed to our model; our options would allow agents a powerful marketing tool for all sellers. We have homeselling solutions where there isn’t an easy one, as in a home in preforeclosure.

Listings hard to Sell
Get listings and get them sold no matter how hard the sale is

We can buy many of the homes that are hard to move. Agents would earn a commission, get credit for a sale, and with little or no work as we can handle the whole transaction.

Guaranteed Brokering Fee

If there’s any doubt that sellers may have issues paying the facilitating agent, we GUARANTEE any shortcoming or the full payment at the closing table. We understand that agents should get paid fairly and timely so we can get generate business and establish a steady relationship.

Sellers, Listing Agents, Buyers’ Agents
Any Real Estate Agent can assist us in completing deals on terms, buying and selling residential real estate

So sellers and sellers’ agents, CONTACT US to find out if and what solution we may have for you and your client; buyers’ agents also, if you have a buyers with any lending challenges, especially if they already failed to qualify upon application, ask us how we can make them successful home buyers.

All Over the USA

We team up with other investors on terms like us or agents and brokers when making deals outside of New England. We are therefore not restricted geographically and buy and sell all over the US.
We look forward to getting the ball rolling with anyone who needs to get a deal done!

Based in New England, we create deals in all states, albeit partnering with local investors and/or agents.

What are Real Estate Investors doing?

Real Estate Transactions during the Corona Virus Pandemic

Investors and the CoronaVirus Outbreak

In GENERAL

Unlike other categories of professionals involved in real estate transactions as acting parties, investors have many different focuses. With focuses strategies can vary greatly and therefore they don’t face the same challenges as, for instance, real estate agents.

REAL ESTATE AGENTS

Agents and brokers tend to focus on traditional sales and rentals, a few specializing in smaller niches like short sales, but most get hired for straight sales or rentals.

REAL ESTATE INVESTORS
Selling and Buying Homes during the Virus Outbreak in the US

Investors may wholesale, rehab, buy and hold. They may be small private landlords or companies with large portfolios. There are also investors on terms and there are pure speculators, builders and developers and many more types of investors involved in real estate transactions.

ADAPTABILITY

Most investors are naturally able to pivot and switch strategies to adapt to a different environment with different challenges and opportunities, depending on the investors‘ specific expertise and inclination.

Business Discussion Talking Deal Concept

Every situation offers different challenges and different opportunities which require different approaches and solutions, especially in real estate.

For sure there are going to be different opportunities as the markets react to the situation created by the coronavirus pandemic. In Real Estate, investors are probably going to be very active, selling to liquidate and raise cash and buying as some homeowners may need to liquidate themselves.

PROXIMA INVESTORS

We’re investors on terms, we will gladly work with sellers who need to sell faster, cash out more of their equity and be able to move on swiftly.


We will also proudly help buyers who need time to secure funds for a purchase, to move into their permanent home right away, which is s important for families nowadays.


There could be issues for many employees whose employers have been hit by the outbreak and even if they would hopefully hit only a small part of the economy, some may have to decide to sell, while others may not qualify for a mortgage due to job loss, downgrade or change.

MERS-CoV Novel Corona virus and the Real Estate Market: Investors


Or maybe they are forced to use savings as emergency funds and not towards a purchase or receive a hit on their credit. We could proudly help all of those sellers and buyers by buying and selling on our specific terms, which are non-traditional, but get the job done.


Home Sellers would efficiently achieve their goals of selling and/or cashing out equity. Home Buyers have the time to secure the funds for a purchase.


Hopefully the impact will be minimal, but if it is, we are going to be here to help like always.
Sellers would have many more and better options enhancing their chances of a successful sale, buyers would have a way to buy and become homeowners or acquire a property that works better very quickly, even without all the funds and/or a dented credit.

IN SHORT

Real Estate Investors are going to be busy!

Investors on Terms: Definition

This entry is part 3 of 3 in the series Investors on Terms

PROXIMA INVESTORS are Investors on Terms!

Mansions in Sterling, Massachusetts. Right on golf courses, satisfying saltwater pools, luxurious wine cellars, comfortably large saunas, professionally equipped exercise rooms, multiple car garages, pristine level grounds, numerous and ubiquitous fireplaces, huge rooms and spaces, areas for all needs and purposes

Our primary objective in the course of our real estate investing business is to leverage deal terms to achieve a solution for Sellers, Buyers and all parties involved in our deals, getting them DONE!

Meaning of Investors on Terms

There doesn’t appear to be ANY official definition of Investors on Terms or Deals on Terms (which are made by Investors on Terms) in general or in detail, nor are they specifically mentioned in public documents or recognized by public authorities or entities, as Purchase & Sales and Rental transactions are (“Subject To” deals are marginally acknowledged). The only deals that the general public may be aware of and can be included in Deals on Terms made by Investors on Terms, are Owner Financing and Rent to Own deals. However, these alone do not explain the concept that characterizes Investors on Terms.

Description as “Investors on Terms”

Hadley, MA: Home for sale on terms, lease-option or seller finance
Hadley, MA: Single Family Home for Sale on Lease-Option

Investors on Terms” is a popular way of describing a certain type of real estate investors, albeit it’s mostly used in the industry and almost lingo of the defined community of professionals, investors and operators active in real estate. It’s a very broad and diverse category which includes many different investors with different, often unique, business models, practices, standards and so on.

Individual real estate investors

Sterling, MA: Home for sale on terms in lease-purchase, owner finance, or straight conventional sale
Sterling, MA: Single Family Home for Lease-Option

Each and every investor may attach a slightly different meaning to “Investors on Terms“. When dealing with investors, the claim should be taken with a grain of salt and the investors’ model examined to determine the exact type of approach to real estate investment.

Unlike other professionals, investors operate more on a smaller, individual scale and with different business models.

Proxima Investors

Real Estate is a solid investment with many ways to monetize and always on demand

For us, Proxima Investors, investing on terms means that we partner with sellers and buyers to find an effective solution to the challenges that they otherwise expect to overcome with a regular sale, with representation from an agent or by handling the deal by themselves.

That’s the core meaning of the term for most investors and their goal, no matter how they distinguish themselves from all the others in the details.

Achieving the goals

In Real Estate Buying and Selling is a challenge and it's different for everyone. That's why a customized solution is to be considered.
Every Home Seller and Buyer has a different situation and challenge; we address it with a custom deal that provides the best solution

Deals on Terms represent an alternative to the mainstream method of buying and selling, especially when they allow to achieve and often overachieve the goals set by sellers and buyers.

In these deals, we don’t focus on the property and its price and/or market value as the only or primary deal point. When we look at a deal, the property is important, but we also dive deep into the whole situation; we dissect all the possible aspects and details of the situation. We look at the big picture and include the sellers or buyers, their personalities and their needs, desires and expectations. We can overdeliver in satisfying the priorities as they are set and expressed by sellers and buyers, if we can leverage effectively all the items of the deal. We create, design and provide a custom agreement which addresses and resolves all the issues of our partners specifically.

In these deals, we don’t focus on the property and its price and/or market value as the only or primary deal point. When we look at a deal, the property is important, but we also dive deep into the whole situation; we dissect all the possible aspects and details of the situation. We look at the big picture and include the sellers or buyers, their personalities and their needs, desires and expectations. We can overdeliver in satisfying the priorities as they are set and expressed by sellers and buyers, if we can leverage effectively all the items of the deal. We create, design and provide a custom agreement which addresses and resolves all the issues of our partners specifically.

Goals and Tools

An “Investor on Terms” looks at the goals of sellers and buyers, proceeds to find the most effective method of achieving such goals by using all the tools that the law, federal, state and local, allow and support in real estate.’

“Investors on Terms” DEFINED:

DEFINITION: In residential Real Estate, “INVESTORS ON TERMS” study and analyze the homeowners’ goals situation, looking deep into the details of the property, and/or of buyers’. Then, they design a deal that leverages as much and as many deal points as possible to achieve the ultimate goal of the sellers and/or buyers.
REMEMBER investors on Terms do business by making Deals on Terms, but each investor has a different interpretation and implementation, style and approach, so no 2 deals are all different!

Conclusion

Hand people are paying the dollar with other hand holds the keys.
Many Buyers are caught out in these days of challenging lending conditions, making Deals on Terms an appealing alternative to get on the property ladder.

That’s the essential traits of “Investors on Terms” and most certainly of Proxima Investors.

Thanks to the tools that the law makes available today, we have much greater flexibility than other professionals in real estate; we can find solutions that work for all parties when a satisfactory solution wasn’t available by mainstream methods.

The downside is that these deals can be intricate and complex. They can prove to be a challenge too hard to face for many who are better off with a simpler, yet risky and/or expensive mainstream alternative.

For all the rest, these deals are not always simple, but indeed always WORTHWHILE!

For this reason, by far most of our deals, are on terms. Therefore, Proxima Investors are “Investors on Terms” indeed!

NEXT: Examples of Investors on Terms

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Investors on terms
Proxima Investors Buy and Sell Homes on Terms throughout New England and Beyond
Creative deals that effectively address challenges that make the sale of a home difficult or the process purchasing a home longer than the market changes and never happens…

Investors on Terms: Context

This entry is part 2 of 3 in the series Investors on Terms

PROXIMA INVESTORS are Investors on Terms!

Mansions in Sterling, Massachusetts. Right on golf courses, satisfying saltwater pools, luxurious wine cellars, comfortably large saunas, professionally equipped exercise rooms, multiple car garages, pristine level grounds, numerous and ubiquitous fireplaces, huge rooms and spaces, areas for all needs and purposes

Our primary objective in the course of our real estate investing business is to leverage deal terms to achieve a solution for Sellers, Buyers and all parties involved in our deals, getting them DONE!

Real Estate Investors Today

In the real estate world, there are investors of all kinds; small and professional landlords, rehabbers and flippers, wholesalers, note investors and the list goes on. There are also “investors on terms“. We, at Proxima Investors, are exactly that, “investors on terms“.

Investors on Terms and Awareness

Rent to own in Sterling MA
Sterling, MA Rent-to-Own: “Contemporary Mansion”

While it’s a quick and easy way to describe what we do, it may be a little more complicated to give the right idea to those who have never heard of “investors or terms”, even within the industry.

Home owners who may buy and sell properties 2-3 times max in the course of their lifetime (pretty much American Homeowners‘ average), are probably the least likely to have done business or heard about an “investor on terms“.

Our actual Sellers and Buyers, now have a good idea. However, with so many different types of deals that we can make, they probably have only a partial understanding of our whole business of “buying and selling real estate on terms“.

Even professionals in real estate may have never heard of what a “deal on terms” and what it entails.

Real estate agents are generally busy listing homes in the ordinary way and closing only conventional deals.

Real estate attorneys may be trained and experienced in conventional closings only. Even many other investors like landlords are not aware of the concept of a residential real estate “terms deal. They are all so ubiquitous and mainstream that anything different for them is difficult to comprehend as they have no experience with Investors on Terms.

Other sectors and times of Real Estate

Norwell, MA Rent-to-Own Homes: “Custom Cape”

If you look into other niches and fields of the vast real estate market, you may find many more instances of “Investments on Terms“. In the commercial sector, much more valuable real estate properties and complex transactions make it worthwhile to negotiate in detail and design sophisticated “deals on terms”.

You don’t have to look far to find “deals on terms“, you can just look at the real estate world in America in the 1970s. “Investments on terms” like Subject To purchases were common and very popular, in the context of interest rates that were very unstable and growing out of control from week to week.

The 2008 Downturn

More advanced and creative deals are needed today to purchase a home with mortgages that are so tough to get, especially for some categories

The 2008 downturn put an end to the easy loans and mortgages that inflated and destabilized the real estate market. The ever rising prices suddenly ended bursting and crashing down heavily, determining the need for tighter regulations. These are now seriously affecting a wide range of the population now needing alternative ways to finance the purchase of a home. This situation brought back some techniques from the past, as the mentioned Subject To deals, from other sectors of the market, just one example would be Lease-Options, or new and innovative, like some unexpected combination of techniques as in a Wrap-around Mortgage, or a classic Owner Finance deal which is pretty intuitive in concept, but a lot of work and expertise is necessary to define the details to make it a solid deal. Those are just a few types of deals that many Investors on Terms can create and manage.

Resistance to competing models

Real Estate Agents in the residential market: they specialize in straight Purchase & Sales and Rentals only.
There are around 2 million active real estate agents in the USA (source: ARELLO) with a population of 327 million, that’s 1 agent every 163 people. And that’s why everyone has an agent within easy reach, at all times.

These transactions are becoming more known and a more frequent choice as the industry, professionals and consumers, learn or relearn about them. The recent history of easy mortgages and refinancing lead to easy transactions with lots of equity. These easy deals shaped the industry into a predominantly intermediated one because the luxury of hiring an agent appeared very affordable while netting inflated prices. Despite the crash, the industry players still dominate, thanks to the stronghold position they acquired. They are able to dictate their only transaction models, supported by collective efforts organized by large bodies like the NRA. They are in control and mount a strong resistance to anything that may disrupt the present order and threaten their dominance. That’s why sometimes, not always, we find real estate agents uncooperative and failing in their fiduciary duties towards the sellers and buyers who hired them.

Increasing Awareness and Market Share

Despite all that, the percentage of deals on terms concluded is constantly growing and so is awareness. Mostly replacing For Sale By Owner transactions, as they typically involve a professional at no cost, they also represent a strong and threatening alternative to hiring real estate agents who charge Sellers a good amount of equity in fees.

When you hear that deals on terms are dangerous, illegal, immoral or anything along those lines, you're hearing the desperate voice of those who just stop short of admitting unawareness, lack of knowledge and no expertise in the field. 

BEWARE of those who make derogatory remarks about their business competitors without any in depth knowledge or experience!

Investments on Terms For Buyers:

Hand people are paying the dollar with other hand holds the keys.
Many Buyers are caught out in these days of challenging lending conditions, making Deals on Terms an appealing alternative to get on the property ladder.

The need for alternative financing and the difficulty in getting it within established models, like the ordinary home purchase through real estate agents, make these deals a very viable option for Buyers. They need to buy in a transaction which needs to take their specific challenges into consideration. That’s what “Deals on Terms” do! That’s also why Buyers compete strongly for any deal available, as it’s often the only quick path to ownership and avoid renting, while housing market prices fly by to sometimes unreachable heights.

Investments on Terms For Sellers:

Many Sellers find themselves left out of the market for no fault of their own or their house. Just too few Buyers. We market the property to many more qualified Buyers.

They are effective for Sellers also because many times without fault of their own or of their home, they are stuck with a property sitting in the market with nothing in sight. The market itself is constantly described as a Sellers market, because there are so many Buyers who want to close on a home. However, many conventional deals fall through because of the way the lending industry processes applications, Deals on Terms restore confidence in home-selling by opening up the market to a much larger pool of strong, worthy and motivated Buyers. Not all applicants pass our Buyer-quality screening process, but the market offers so many better and faster opportunities. That’s what you can correctly call Deals on Terms a Sellers’ market.

NEXT: Definition of Investors on Terms

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Investors on terms
Proxima Investors Buy and Sell Homes on Terms throughout New England and Beyond
Creative deals that effectively address challenges that make the sale of a home difficult or the process purchasing a home longer than the market changes and never happens…

Investors on Terms: Introduction

This entry is part 1 of 3 in the series Investors on Terms

PROXIMA INVESTORS are Investors on Terms!

Our primary objective in the course of our real estate investing business is to leverage deal terms to achieve a solution for Sellers, Buyers and all involved in our deals getting them done!

Hadley MA: Rent to Own homes by Proxima Investors

by Proxima Investors of Northborough, MA

Homes get sold and Sellers succeed. Buyers are able to Purchase. Everyone gets what they want and need, are paid and everyone is happy and able to move on.

Not many know exactly what a deal on terms is; it seems useful and maybe even necessary to clarify what we mean by being Investors on Terms.

A small series of articles as posts in this blog will attempt to explain how Investing on Terms works. Keep in mind that it may widely differ from what and how other investors use similar methods; they may be in different niches, states, deal with different properties and types of Sellers and Buyers.

This is just the INTRODUCTION so you know what it’s about.

We will start by describing the CONTEXT which is important to define the role and the activity of Investors on Terms.

Then we will go straight to our own DEFINITION of Investors on Terms with details about the meaning of the term.

Some EXAMPLES in the following blog post will be very useful to understand the concept of Investments on Terms in practical terms to see what it’s like in a realistic environment.

What do Investors on Terms mean for Sellers, Buyers and their properties and how they affect the situation of all investment PARTIES.

PROXIMA INVESTORS, Deals on Terms and how they fit in our business model of real estate investing in the residential niche.

Our FINAL THOUGHTS about Investors and Investments on Terms will follow to go back to the whole picture and conclude our explanations.

Finally, space for QUESTIONS and COMMENTS, which are a great way to get a better understanding of the idea of Investments on Terms and its applications in individual situations.

As a bonus, we will progressively compile a GLOSSARY of the Investors on Terms niche for quick reference with useful links to more info.

NEXT: Context of Investors on Terms

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Investors on terms
Proxima Investors Buy and Sell Homes on Terms