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Can You Really Buy Property with NO MONEY DOWN?
If you've ever had insomnia and watched
late night television you may have seen the infomercials
telling you that you can buy real estate no money down.
But can you really purchase investment property without
having any cash? The answer is, "yes!".
Anyone can purchase property without
having any cash, but it's not nearly as easy as the
gurus proclaim. Can you do it even if you have bad credit??
Yes, but it's a whole lot easier to do it if you have
good credit.
In fact, with good credit it's easy
to get cash when you buy. Here's how you can get paid
when you buy a piece of property.
Example: Property is for sale for $100,000.
1. You ask the owner of the property
to give you a note for $30,000 secured by other property
you own or even as an unsecured note (you can put a
VA clause in the note allowing it to be moved back to
the subject after the closing).
2. You get a conventional loan for 75% of the sales
price.
3. You ask the seller to pay your closing costs.
4. You ask the seller for a carpeting allowance of $2000.
Here's how the deal works;
- You buy the property for $100,000.
- You pay the bank on a $75,000 mortgage.
- You pay the owner on a $30,000 mortgage.
- The seller pays your closing costs.
- The seller pays you $2000 for carpeting.
If the property is rented out for $1000,
you collect the rents and security deposits.
In the above example the buyer would
walk away from the closing with a $100,000 property,
$5000 from the over finance, $2000 for the carpeting,
and $2000 for the rent and security deposit. That's
a total of $9000 for buying a piece of investment property.
NOT TOO BAD.
Will every seller be willing to do this
deal with you? No, maybe only one seller in ten or twenty
will be willing to do this deal. But there are sellers
who will do this deal. What you have to find is a motivated
seller.
What makes a motivated seller?
- An owner who is in foreclosure.
- An owner who got the property as part of an estate.
- An owner who no longer wants to deal with tenants.
- An owner who is in divorce.
- An owner who has been transferred out of state.
Now that you've bought a property and
put money in your pocket be prepared to deal with the
tenants.
Good Luck!
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