Is It Possible To Buy Property With NO MONEY DOWN?
Posted on November 1, 2009
Filed Under foreclosure investment property |
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.
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- 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.
The day will come when you can use something you read about here to have a beneficial impact. Then you’ll be glad you took the time to learn more about finance.
Michael Hehn
http://www.articlesbase.com/non-fiction-articles/is-it-possible-to-buy-property-with-no-money-down-89149.html
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3 Responses to “Is It Possible To Buy Property With NO MONEY DOWN?”
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Is it possible to purchase investment property with no money down?
I have recently moved and was a victum to an adj rate mortgage. Now I am renting for the first time in 14 yrs. My family has agreed to purchase a home for myself with it in their name. We have been checking and for them to purchase the home it is %20 down on investment property? There credit is about 695 so a loan is real possible. We are wanting a way to purchase an $80,000 with minumun money down if possible.
This could be tricky. Have you spoken w/any lenders? It will be an investment property for your family since they won’t be living there.
Did you lose your house to foreclosure? If so, you probably can’t be on the title/mortgage loan.
Where are you looking to buy property?
Even a "FSBO" (For Sale By Owner) will probably require a stiff down payment.
How about a VA assumable? I’m not sure the minimum required, but in the past these were assumable with a 1.5% VA funding fee.
Lease to own (contract for deed?)
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try and find someone that will do seller financing or try and borrow money from elsewhere…maybe a bixness credit card or a credit card that no interest or payments for a long period of time. thanks
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