sayyes
Preferred Member
Cash: $ 11.60
Posts: 143
Joined: 02 Jul 2005
Location: Newport, RI
|
| No Money Down??? |
 |
|
Hi everybody,
I see alot of programs (books, DVDs, etc.) out there that claim you can buy real estate for no money down.
I am curious on how this works. If someone could fill me in, I'd appreciate it!
Money Blog | Financial Goals Explained | Bargains Online | Refinance
|
Fri Jul 22, 2005 12:19 pm |
|
|
David Briggs
Senior Member
Cash: $ 57.86
Posts: 289
Joined: 16 Jan 2005
|
Those "techniques" assume fairy tale behavior on the part of motivated sellers, and are now either mostly obsolete or were always nonsense.
However, I have heard that there are a few portfolio-style lenders offering mortgages based solely on the creditworthiness of the borrower and the quality of the property, and which waive any requirement of borrower's equity. As a practical matter, that comes pretty close to meeting the definition of no money down.
~~David
|
|
Fri Jul 22, 2005 1:03 pm |
|
|
sayyes
Preferred Member
Cash: $ 11.60
Posts: 143
Joined: 02 Jul 2005
Location: Newport, RI
|
When you say "fairy tale behavior" I'm guessing you mean that the sellers are willing to sell the house for much less than it's worth. I always thought those ads you see for "We Will Buy Your House" are put up by people in these programs trolling for people on the brink of foreclosure.
So, is the scheme: buy low from a sucker and sell high (or at market value)? I guess the problem is you have to find a sucker and then sell the house before the first mortgage payment is due. Is that correct?
Thanks for your help.
Money Blog | Financial Goals Explained | Bargains Online | Refinance
|
|
Fri Jul 22, 2005 3:39 pm |
|
|
David Briggs
Senior Member
Cash: $ 57.86
Posts: 289
Joined: 16 Jan 2005
|
Obtain an option to buy the house (tie it up for 3-6 months) for $10 with an exercise price which would put more meaningful money in the hands of the seller if you exercise your option. Then shop around for a buyer, or cultivate a stable of buyers with good credit to structure your transactions around.
Most flips and foreclosures aren't "no money down" situations, and require you to put a subtantial amount of your own money into them to make them work, with a corresponding risk that you have guessed wrong about the untapped value which you are trying to tap out.
~~David
|
|
Fri Jul 22, 2005 5:07 pm |
|
|
bong12187
Preferred Member
Cash: $ 24.50
Posts: 120
Joined: 31 Jul 2005
|
|
|
|
[quote="David Briggs"]Those "techniques" assume fairy tale behavior on the part of motivated sellers, and are now either mostly obsolete or were always nonsense.
I would recommend them infomercial in a heartbeat. You got nothing to lose but a couple of hundred bucks. Hell many of the posters here lose more than that in one day depending on the market. Your biggest gain will be knowledge. I own apartments, rental houses, and a commercial building and thanks to those infomercial, I am making it. Do I follow them blindly. Not exactly. But i do get what they have to offer and try to make it work for me. Here is an ex. of a 4 unit apt that i just purchased 3 weeks ago.
Selling for 240k awhile back. I waited and it finally went down to 170k. Offered 160k and was accepted. Borrowed 25k from one bank to pay for closing and repair. Bank let me borrow 170k (isn't this great). Property was appraised for 220k (equity of 50k which the bank was eager to give me an equity loan). My contractor is currently fixing the place but another 4 unit apartmen (30 feet away from my property) just got sold for 235k. After repair, I figure that property will be worth 250k and will sell for that. Repair should be done by 15 Aug. Will also put tenants in it so I can get a passive income until I sell. Already got an offer for 240k but i'll hold out. Bottom line, no money came out of my pocket and I was able to use OPM to finance the deal. I can walk away now and pocket 50k in the process for a 2 months worth of work (ooopppsss forgot my contractor is the one who worked at the property) I mean, my time.
I would recommend Robert Kiyosaki's Rich Dad/Poor Dad or that dude with no money down (he's been around for years now) so he must be doing something right.
|
|
Mon Aug 01, 2005 6:01 pm |
|
|
MattL
Senior Member
Cash: $ 46.85
Posts: 234
Joined: 25 Jun 2005
|
| Re: No Money Down??? |
|
|
quote:
Originally posted by sayyes
Hi everybody,
I see alot of programs (books, DVDs, etc.) out there that claim you can buy real estate for no money down.
I am curious on how this works. If someone could fill me in, I'd appreciate it!
It would be pretty tough to buy decent properties right now for $0 down given the current market. What you could do is get ready for the right time when the market goes flat or down (maybe next year?) by educating yourself. You could even save some money while you are waiting to cover expenses.
$$$ Debt Elimination
Software | Computers | Electronics
|
|
Wed Aug 03, 2005 4:08 am |
|
|
bong12187
Preferred Member
Cash: $ 24.50
Posts: 120
Joined: 31 Jul 2005
|
| Re: No Money Down??? |
|
|
It would be pretty tough to buy decent properties right now for $0 down given the current market. What you could do is get ready for the right time when the market goes flat or down (maybe next year?) by educating yourself. You could even save some money while you are waiting to cover expenses.[/quote]
As i've said earlier, you can make money whether there is a bubble or a bust. For knowledgeable real estate investors, it is not tough to buy decent properties with 0 down in any market. You don't have to wait till the market drops to make money (however you make bigger gains in a down market). I will agree with Matt that people have to be educated if they want to pursue real estate investing. I recommend people to learn taxation, financial statement, banks requirements, credit report, good debt vs. bad debt, GRM, what is the cash on cash return on investment, interest vs. APR, income to debt ratio, insurance, just to name a few. If people are not well versed with a few of the things that I mentioned then Matt will be right in saying that it is tough to buy a property now with 0 down... 
|
|
Wed Aug 03, 2005 5:39 pm |
|
|
Ellis
Member
Cash: $ 3.00
Posts: 15
Joined: 23 Aug 2005
Location: Washington State
|
| Re: No Money Down??? |
|
|
quote:
Originally posted by MattL
quote:
Originally posted by sayyes
Hi everybody,
I see alot of programs (books, DVDs, etc.) out there that claim you can buy real estate for no money down.
I am curious on how this works. If someone could fill me in, I'd appreciate it!
It would be pretty tough to buy decent properties right now for $0 down given the current market. What you could do is get ready for the right time when the market goes flat or down (maybe next year?) by educating yourself. You could even save some money while you are waiting to cover expenses.
I dont think you understand how mortgages work nor some of the programs available by lenders. There are many ways to get into no money down situations.
Take my house for instance, its interest only arm w/ no down payment and this program was available from basically any lender you care to name in the us. You could also get 100% financing from some lenders if you meet thier reqisite and 2nd mortgage and helocs also make no money down possible.
However, outside the mortgage industry there are also creative financing techniques that would also produce "no money down" situations for home ownership.
If you have any mortgage questions
or need help with a loan you can contact me at: EllisJackson@rhmbanker.com
|
|
Tue Aug 23, 2005 3:18 pm |
|
|
mochilero
Member
Cash: $ 2.60
Posts: 11
Joined: 22 Aug 2005
|
| here's a no-money-down deal |
|
|
I sold a rental property with $1,000 down a couple years ago, just because I wanted the higher price I got, and the interest. Maybe the buyer got the $1000 on a credit card (That would only add $25 to his monthly costs). That would make it a no-money-down deal.
Won't know until you try. Just remember that no-money-down just means none of your money. We just sold our home, and if someone had gotten one of those 80% low-doc loans, we would have written a second for the other 20%, making it a 0-down deal.
The point: Get educated and give it a try.
Steve
http://www.HousesUnderFiftyThousand.com
|
|
Thu Aug 25, 2005 8:15 pm |
|
|
xboxundone
Senior Member
Cash: $ 67.83
Posts: 796
Joined: 19 Sep 2004
|
you guys state 0 down is fairytale or non existant is CRAP it exists and many people use it. as there are plenty of mortgage companies that will give you a 110% mortgage thus the 0 down... this is risky on your part and will most likely pay a little but higher interest rate but 0 down buys are a reality.
Another way is in areas that aren't as hot and Cali or NE you can offer the asking price but disclose that seller will pick up closing costs....
Hope this helps those really looking for 0 down as they DO exist and are FAIRLY easy to get. Even some new home builders in houston area are offering this!
|
|
Thu Aug 25, 2005 8:31 pm |
|
|
|
