Buy No Money Down

Get funding for your real estate deals - some ideas. Note it says “No Money Down” not “No Money”, so you may need

to consult with a lender when buying with no money down. And

with most institutional lenders you need to put 10 to 25% down

depending on what you are buying, the risk of the property, and

your experience.



Right now in the market of Sept 2008, financing the deal has become

one of the biggest challenges for buyers and for sellers. So

let’s look at some ideas. Keep in mind that many of these ideas

take a motivated seller, so if your seller is not motivated, move on

to the next property.



1. Owner Financing: Get the seller to finance all or part of the

purchase price. Seller takes a note for the full amount to be paid

at a future date.



♦ One lump sum at future date

♦ Installments till paid off

♦ With or without interest

♦ Interest Only Payments

♦ Interest & Principle Payments



Let’s say you get a seller to sell you a great property that is a little

undervalue because it is distressed in some way. They agree to

finance your purchase in some sort of seller financing. You take

over the property and fix the distress: make repairs, lease up a

vacant building, get it rezoned, or fix what ever is distressing the

property. You can keep the seller financing in place or if it is more

economical at some point to go to the cost of refinancing into an

institutional loan. Look at the interest rates you are paying and

see if the savings in interest with the new lender is enough to

cover the cost of refinancing.



2. Get an institutional loan for part of the purchase price and get

the seller to finance all or part of the down payment. Again, the

seller finance could be with interest or with out, depending on their

motivation.



3. Borrow from a Private Lender (think Private Individual) for all

or part of the purchase price. If you have a truly great deal, one

with plenty of equity, you can take your details of your deal to your

local REIA club or online networking group, or even people you

know who may be in the business and ask them to fund your deal.



4. Get a signature loan. Be sure to establish yourself as a good,

solid business person with a local bank. Many times a few years

of doing business with you and seeing the funds that go through

your accounts and what you save will go a long way to establishing

your “good credit” with the people at the local bank. Talk to

them about getting signature loans for all or part of the purchase

price.



5. Take over the property subject to the existing financing. The

seller may be willing to let you take ownership of the property and

take over making payments on their existing loan. Once you own

the property, and have turned it around from it’s distress, then you

may be able to keep their existing loan in place for a length of time

or refinance it out at your earlier convenience. Again weigh the

cost of refinancing with the new interest rate you will receive.



6. Get an Equity Partner. Again with a truly great deal, you can

go to your networking groups, offer up the details of why it is a

good deal and ask for a 20% partner who will put in 20% of the

purchase price in cash, to go with your good credit and experience

getting the 80% loan from the lender. Your partner gets

20% of all profits or what ever you determine at the outset. For

that matter, you could have the seller be your 20% partner.



7. Another form of Equity Partner might be to get several equity

partners and pay cash for the deal. For example, get 4 partners

who will each put in 25% of the purchase price for 20% of the

equity and profit, you keep the last 20% equity and profit for

yourself for finding and managing the deal.



8. Rebates at closing for the down payment: Repair allowance

for repairs, security deposits assigned to new owner, rents credits

from the tenants would all be items that the seller may be able

to rebate to you on paper for your down payment at closing.



9. Seller Carry Back second. You get a new loan for 80% of

the purchase price and the seller carry’s back a 2nd mortgage for

20% of the purchase price.



10. Have the seller create a 2nd mortgage secured by some

other piece of real estate you may own with more equity.



11. Barter still works, it may be that your seller wants to downsize

to a smaller property and you have one that work great for

them. Trade them your smaller renovated home for their much

larger distressed home.



12. Use the seller’s property for collateral on a 2nd mortgage.

When buying a property with several parcels, maybe a 5 building

complex or 5 houses, have the seller give you one property free

and clear, buy the others at a slightly higher price. Take a mortgage

out on the free and clear property to use for a down payment

on the other four.



13. Sell off items on the property acquired to pay for the down

payment. Is the property filled with antiques that go with the

property? Are there mineral rights you could sell off? Could you

buy a house with land and keep the house and sell the land to a

developer?



14. Create a corporation and issue stock to raise funds.



15. Acquire the property at a specific price and give seller rights

to future profits to pay off the seller’s equity in the property.



16. Tax Credits is a whole field in and of itself. If you can find a

way to acquire tax credits for the project and then sell them to

huge corporations, you can use this for down payment and repairs.

Used in a lot of multi family and commercial redevelopment



17. Find a Hard Money Lender to fund the deal.



18. Get a loan from a family member.



19. Have the seller finance you with a first and a second mortgage

and then find a buyer to buy the first at a discount at or

right after closing. Closing is contingent upon you finding a

buyer for the first mortgage.

There are even more ideas on how to buy with none of your own money in the deal and many do not require any of your credit.

The more you know about buying & financing real estate the

higher your likely hood of putting together a no money down

deal.



Some areas you need to get education on:



1. Creating, buying, and selling private mortgage notes. One

of the countries leading experts on this subject is Donna Bauer.



2. Finding Truly Motivated Sellers, ones that will be willing to

put together a creative deal is a subject that many of the trainers

out there discuss and asking the right questions to find out the

seller’s motivation is just one of the things that Robert Shemin

usually discusses.



3. And finding motivated sellers with multi family properties is

something that you will be able to learn from David Lindahl.



4. Finding Private Individuals with retirement funds to invest

and showing them how they can put these funds into a self directed

account and then be able to lend to you is also something

you really need to have in your real estate tool box and Edwin

Kelly with Equity Trust Company is a Great Source for this information.



5. Building your own credibility to be able to network and approach

others to ask them to be your partner or private lender

and then being able to automate much of this process with your

computer and the internet is something that Duncan Wierman

has down pat.



6. Keeping in mind in single family that using all these same

techniques to put together a deal for your buyers with little to no

money will help you become profitable as well, and Andy Heller

has corner of the market figured out.



7. And then your best tool to do a no money down deal is to

network live and in person with other people in the business, who

may have done a deal like this, who could be your private lender,

who know you, and the best place to do that in Kansas City is at

MAREI and at our EXPO 2008.



Find out more about the above trainers and our EXPO 2008 a

Real Estate Investor Conference, by going online to:

www.mareiEXPO2008.com