No Money – How to buy a property with nothing

No Money – How to buy a property with nothing

If you’ve ever watched TV after about 11:30 at night, you’ve seen people talking about courses to buy real estate with no money down. They show vacation paradises, gorgeous girls, fancy cars and huge mansions. All this is promised to you if you buy their course to make millions for nothing! If you want, you can spend “just three payments of $99.99” to find out about this exciting field…OR…I’ll just tell you for FREE!

One thing I must mention first though is that ANY information combined with NO action leads to NO results. If I come to your house and show you everything in person and answer all your questions and then you do NOTHING…it was a waste of time. Yours and mine!! On the other hand, if you combine the information with hard work, persistence, and most of all, courage, you will succeed, whether you buy the courses, read the books for free at the library, or get the information from me, right here!

I mentioned GUTS because there is a price to be paid for everything. If you had a million dollars, you could buy an apartment building with almost no difficulty. Just pick one that you like, has a good return and has passed a building inspection.

If you DON’T have a million dollars, what do you do? Be prepared to work hard to find the right deal. Get ready to get a whole bunch of offers rejected and maybe even laughed at. Get ready to hear some cocky real estate agent tell you (as one told me) “Son, I’ve been in the real estate business for thirty years and let me tell you, there’s no such thing as a no-money-down deal.” Get ready to you work on a deal and bide your time on it only to have it collapse.

You will contribute your down payment in the form of “brain sweat equity”. You will pay by gaining more knowledge than others in the field of creative real estate and by looking long and hard to find MOTIVATED sellers, ones who are desperate to get rid of their properties and therefore willing to help you. Most of all, you will pay by enduring the inevitable “start-up problems” that EVERY business or enterprise has. If it was easy to do then everyone would be doing it and there would be no properties left! It’s that difficulty that makes it EASY once you know what you’re doing!!

OK, here we go, but first you need to know ONE thing: IN REAL ESTATE, EVERYTHING IS NEGOTIABLE!! Let me say that again, because this is the basis of how creative real estate works – in real estate, EVERYTHING is negotiable!

What does this mean? Are there any limits? NO!! Can you get someone to maintain a sales agreement for 25 years with little or no money down and no credit check? YES!! Are there ten ads in the paper offering just such an arrangement, or just one? Probably none! What does this mean? EVERYTHING is negotiable! If you find a motivated seller, one who pays monthly to own this property, one who doesn’t have the skills to fix it up, one who has moved out of town or out of town, then he CAN do it! Notice I didn’t say I WILL, but I CAN!

Think of yourself when you had a car that you wanted to get rid of because it was junk. If someone walks up to you and asks “how much?”, you say “$1000, solid”. But deep down you knew you just wanted to get rid of the headache!! And if you’ve ever had to wait a month or two without anyone buying your car, suddenly you weren’t so tight-lipped about the price! And if the alternator had to be replaced before the car would run, pretty soon you just wanted it OUT of your hands!! NOW you are ready to accept monthly payments, maybe hold something as collateral, etc. You just want it GONE!

It’s the same with real estate! They go from being our pride and joy to an albatross around our necks – then we’re willing to do ANYTHING to get rid of them!

These people aren’t going to jump up and down and say “I’m willing to take a no money down deal on my property”! They will become depressed, just like that guy with a rattle in his backyard that sits there for months. They will need a little convincing, but if you find “I DON’T WANT” then the hard part is over! You then make offers, scrutinize each property to see if you can take advantage of it (that’s a whole other report!) if you can get the property – sometimes you don’t want it either! Then it’s just a matter of making offers, in person or through a broker, until you find someone who is
ready for a deal. The first time is the hardest because no matter how many times I tell you (or the TV guys) that it CAN be done, you will think “not to me, not here in __________, not anymore, not with my district laws and zoning ordinances, not with my personality, not with my brain, etc.”

Don! Look at all the people in TV commercials – all shapes and forms – they have ONE thing in common – they went out and DID IT!


Here is a “stream of consciousness” of ideas on how to buy with $000.00 down, but keep in mind the whole time, EVERYTHING IS NEGOTIABLE IN REAL ESTATE!

1) The easiest way to buy with no money down is to get the seller to enter into a sales agreement. Monthly payments over 25 years are possible if the seller doesn’t need the money and can be persuaded to get the 6.7.8% return secured on their house instead of buying a 4% bond.

2) If you have good credit and don’t want to put money into a property, try a first mortgage, the seller carries a large second for the balance. The seller gets, say, 75% and wears 25%.

3) Again with good credit, try first, a smaller second and a personal line of credit for the balance – especially if the difference is only $10-15,000. This can even work for low priced properties where the first mortgage is combined with a PLC for the rest – be smart enough to go to another bank for a PLC and tell them you’re going to make a cash investment – and don’t Tell ANY bank you’re doing a cashless deal!

4) Paying on time – seller wants $5000 down, for example. How about $400 a month for a year? You’re still paying it, but over time – maybe the property will generate enough extra cash to pay that off!

5) Delinquent Taxes – I have done deals where I have assumed delinquent taxes due – you can pay them off as you see fit, within reason!

6) Free Rent – I have done deals where the seller had office space in the building and took 2 years free rent as a down payment! It can also work for many families.

7) At closing there are adjustments for that month’s rent – close on the 2nd or 3rd to maximize this – and for damage deposits, taxes due for the period the seller owns, utility bills services to be paid for, etc. They can add up to a large amount!

8) Since the bank starts the mortgage payments one month after closing, simply paying a 2 week interest adjustment allows you to use the first month’s rent and apply the second month’s rent to the mortgage payment.

9) Take loan against insurance policy, stocks, bonds, mutual funds etc. If you let the bank provide the collateral, they will be very accommodating.

10) Stack your Visa, Mastercard and American Express cards. A little crazy, but I guess it’s a great investment!

11) Borrow from friends, relatives, boss (paid leave?) Maybe even include them as partners!

12) Affiliates are a surefire way to get accepted for big bank loans, create enough down payments, etc. Always look for people who are interested in this area and ask them what is stopping them from buying investment properties. If there is time, expertise, etc., then you have the right one! All that stands in your way is money – and you’ve found that great property, haven’t you?

13) Syndicate a group of people – say 9 investors and you will get the last tenth to put the project together – they will provide the financial strength for the loan and maybe even the down payments! Anything is possible, remember? It is a lot of work to find these people, but VERY profitable! Start with dentists and doctors, lawyers, everyone you deal with!

14) Rent to Buy – maybe you make payments for 3 years and then have the down payment built up – in the meantime the value of the property can go up, rents go up, etc.

15) Option to Purchase – Seller retains ownership and receives all proceeds. You simply pay an amount for the right (make it REALLY legal!) to buy the property at a certain amount for X years. There may be a trade for this option, for example an item or service trade for the option.

16) Let’s make trading an item or service for an upfront payment your own idea!

17) Foreclosed Property – Maybe right before it goes into foreclosure, you offer to continue the payments and give the seller SOMETHING, SOMETIMES for their equity. (After a while he will get nothing!) Lots of work, lots of books and available messaging services.

18) Fix damaged property-work deal with bank–example: since it cost $75,000, with cleanup and repairs it costs 100,000–bank offers 75,000 mortgage based on future value–you have to fix–similar to sweat equity .

19) Lease a property (ie an office building) from the owner and rent it to tenants – must be very legal and usually requires a lot of effort to rent!

20) Pay someone to co-sign a loan

21) Make the broker carry their commission as a note – they HATE this, but if necessary…

22) Balloon payment – nothing down, balance due after three years

23) Private Money From Mortgage Brokers – Ask Them About It! High interest but…

24) Refinance a property either before you own it or after

25) Find a partner where he takes a negative cash flow write-off and you manage a property – this can even work for buying your personal residence – the investor is happy with $200 a month negative cash flow in exchange for you taking care for ownership, always a tenant (you) and an investor split the profit on sale.

That will be enough to start some gears turning in your head. The most important part is to keep trying and be creative. Combining pieces of one idea with another and always looking for what the seller wants will lead you to solutions. Always look for ways to make both of you happy. Everyone wants all the money right now – not everyone gets it! Think of the junk car in the backyard and look for ways to HELP the other person – he wants to sell!

Most of all, keep looking! It is not a failure on your part if someone clings to the hope that they will get a certain price or certain terms. If they can – great!! If not, check back in a few months. Many properties are still sitting there, and with a MUCH more responsive seller, after their property is “sitting in the backyard, rusting” (or accumulating negative cash flow and maintenance and property management headaches). Try and try again!

Check online for new information and more opportunities, connect with other investors, ads can be used to signal what you are looking to find, partners wanted, etc. Go to your public library for more real estate and business information. Keep your mind working and searching – keep looking for properties and more information – an idea can be worth a fortune to you – go to seminars when they come to your town – and the total adds up to “Eureka!” I screamed in the middle of the night.

Buying with a low down payment is obviously a lot easier than buying with absolutely nothing, so be sure to save your money to make it easier. Even a no-cash deal may require cash for legal fees, closing costs, etc.

Best of luck!

#Money #buy #property

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