If you've read my article "Purchasing Property With No Money Down. . ." today's article may seem a bit conflicting. Bear with me, though, and you'll see that it is not. In Purchasing Property With No Money Down. . ., I explain how buying up property at inflated values at a break-neck pace is no way to be successful in real estate. I explain how this is a form of investment real estate finance that is possible but not advisable. In this piece, I'd like to express that buying property with no money out of your pocket can actually happen and can be a great technique, if it's done properly.
Let's suppose you find a house that you're interested in purchasing as investment real estate. The owner, who also uses the real estate as investment property wants to get out quickly. This is a perfect opportunity for you to get the house with no money down. Note, look for ads that say seller financing or motivated seller to find these types of deals.
In lieu of conventional bank financing, you may offer the seller his exact sales price, if he agrees to finance the sale for you. Before going this route, ask him if he's willing to take a considerable amount less than his asking price; if he's motivated, he'll likely say yes, assuming he's going to get a bank check. Now, you come in with much more money, but you ask him to finance the loan.
Here's where salesmanship is critical. Offer him a deal that he can't pass. If he's selling for $100,000 but was willing to take $88,000, you'll give him his entire asking price of $100,000 with very special terms. Although you amortize the loan over 30 years, you promise him that you'll pay him off in three years or less. Meanwhile, you'll pay him interest only payments on the note at 8 or 9 percent. Explain to him how he'll make all of this money on top of the $100,000, because you're not paying down the note with your monthly installments. Because you're giving him such a great deal, you will not pay him anything as a down payment.
Now, you may be thinking this doesn't look like a good deal for you. Here's how you make it a terrific deal. The second you close the deal with the seller, you stick a for sale sign in the yard, announcing that the "Owner will finance." Now, you sell the house for $110,000. You take a $5,000 down payment, and you take interest-only payments on $105,000 at 8 or 9 percent interest. You are making more than you have to pay the seller, plus you have the $5,000 in your pocket. This is truly a sweet, No Money Down investment real estate deal.
NOTE: if the seller insists on a down payment, you offer him the $5,000 you plan to collect from your buyer. Be sure to get him to allow you to defer the down payment for three months. This gives you time to sell, collect the 5k and pass it along to him. This isn't as sweet as pocketing the $5,000 yourself, but it's still a no money down deal.
Mark Barnes is the author of the new novel, The League, a shocking, sports-related conspiracy. Learn more about his suspense thriller at http://www.sportsnovels.com. He is also an investment real estate and home loan finance expert. Get his free mortgage finance course at http://www.winningthemortgagegame.com
I really believe in getting an education in real estate... Read More
In many places you can buy a house and a... Read More
Starting real estate business is not that simple. Multiple aspects... Read More
I know many investors step into the game of real... Read More
If you are thinking of selling your home, there are... Read More
Do strangers scare or intimidate you? If you're planning to... Read More
Historically, real estate agents have represented the seller of a... Read More
Lower Your TaxesTax incentives for real estate investors can often... Read More
Cyprus is fast becoming a property hotspot for thousands of... Read More
When you call sellers, what do you say? When you... Read More
Why should you do your own real estate inspection? To... Read More
Homebuyers and sellers should be aware about issues involving homeowners... Read More
Looking to buy real estate in Utah? The market has... Read More
If you really want the best deals in investment properties,... Read More
If you have a current mortgage and are unhappy with... Read More
Purchasing or selling a home will probably be one of... Read More
First impressions count, buyers will have already formed an impression... Read More
You'd like to buy a vacation home, but you're not... Read More
You are attracted to a home for more than its... Read More
As the second largest city geographically in Florida, this beautiful... Read More
When you are considering purchasing a property; either for investment... Read More
Having your house appraised can be a scary step in... Read More
Do you need to sell your home quickly? If so,... Read More
You've probably seen the ads or heard about apartment locators.... Read More
One of the quickest ways to real estate profits is... Read More
Welcome to the second segment of a three-part series about... Read More
I can't emphasize enough how important it is to have... Read More
If you are looking for a steady, income-producing investment that... Read More
Even if you're counting on rising property values to eventually... Read More
Every year hundreds of thousands of foreign visitors travel to... Read More
The conclusion of final agreement between a seller and a... Read More
First you need to find a list of For Sale... Read More
In a previous article we introduced you to the concept... Read More
Real estate agents, Canadian citizens and foreign investors interested in... Read More
Whenever you own a piece of land, you will be... Read More
First, let me state that I'm not an attorney and... Read More
Staging can involve minimal effort on the part of a... Read More
If you are investing in real estate you will face... Read More
Zero down? Why would a seller want to walk away... Read More
Selling your home requires some thought and a clear plan... Read More
Most experienced property investors use property managers. Why? Because they... Read More
I teach students how to set up a new business... Read More
Waterfront living is among the most desirable of locations in... Read More
At this moment, you have access to some amount of... Read More
The Internet is a powerful marketing tool, but just how... Read More
You don't get what you deserve - you get what... Read More
Searching for just the right home can be very exciting.... Read More
For decades, the real estate world turned in a predictable... Read More
Most people in America rent a personal dwelling!Just think how... Read More
In addition to zoning, some properties have covenants recorded at... Read More
Many would-be real estate investing professionals face discouragement because of... Read More
Real estate investing is not in any list of high... Read More
My report is for you to use your power to... Read More
In this country millions of homes are sold every year.... Read More
Given the current interest (dare I say hysteria) associated with... Read More
Congratulations! You've decided to purchase a home. We all know... Read More
If you want to become a real estate investor, find... Read More
The real estate cycle, like the business cycle, refers to... Read More
Do you want to build wealth through real estate? You... Read More
A big debate these days is whether or not to... Read More
As with any business transaction, there are pros and cons... Read More
With so many estate agencies vying for your business, choosing... Read More
Beauty is in the eye of the beholder, particularly when... Read More
Most business owners will, at some point, want or need... Read More
Estonia's reputation is growing within the property investment market. Rising... Read More
When I first started getting active in creative real estate,... Read More
Real Estate |