Getting Started with Purchasing Real Estate with No Money Down

A common misconception is that you need a large sum of cash and pristine credit to get started in Real Estate, but that is just not the case. What follows are some tips for people who have financial constraints but want to get started with purchasing real estate at no money down.

Two types of quick sale investors exist: retailers and dealers. The former buys property and turns around and sells that property for profit; they have high risk, but typically also reap high rewards. This requires substantial startup costs and is not a good way to begin purchasing real estate with no money down.

A dealer works with contracts, not properties. A dealer looks for under-priced and sign purchase agreements with their sellers, then turn around and sell the contract to a retailer for profit. This is called “assignment of contract.” This is a great way to begin purchasing real estate with no money down.

Typically all you need to begin is earnest money, then you can flip that property for a decent profit (up to $3,000 usually) without actually possessing the deed.

Another method for purchasing real estate with no money down is called a “double closing,” which allows a dealer to earn more than an assignment of contract. With this method, the dealer has more risk because if the deal is called off, he or she receives nothing.

A double closing is another avenue for purchasing real estate with no money down. In a double closing, the dealer will sign a purchase contract an owner, then a contract with the retailer for a higher price. The retailer puts that amount into escrow. The owner then signs the deed to the dealer, who signs it to the retailer. The retailer signs the loan documents and you’re done; the owner gets his asking price and the dealer gets the difference, effectively purchasing real estate with no money down.

A third type of purchasing real estate with no money down is acting as a “scout” that flips information instead of properties. A scout gathers information about a property and sells it to interested parties. Scouts basically do the dirty work and get paid for it, gathering the following information:

- Owner contact information
- Price
- Mortgage Information
- And outstanding leads
- A picture of the property
- Information on why the owner wants to sell

This is a great form of purchasing real estate with no money down; a scout can usually make up to $1,000 for good information, and there’s no risk. Investors realize that information is valuable and are willing to pay for it.

A fourth way of purchasing real estate with no money down is through a clause. Almost all homes since 1989 have a clause called “due on sale,” which means that when ownership is transferred, the lender can demand full payment on the loan.

The key term here is “clause” – not law. The lender doesn’t always act on this, and sometimes when you take over payments the lender may not even notice or care if they do notice. The cost behind initiating this clause is not insignificant and a lender doesn’t usually care who signs the checks.

You can absolutely earn profits by purchasing real estate with no money down and some real estate sales tips. Don’t confuse this with success coming easily; hard work is required to succeed. Your mind is always your number one asset – invest in yourself by educating yourself daily.

Flipping properties is a fast way to earn in real estate. Want to find out everything that there is to know about flipping houses legally, ethically, and profitably? Visit realestate-syndication.com for your free report.

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