Is Purchasing Real Estate With No Money Down Possible?

People hear about it everywhere they go from all types of media outlets, but the question still remains:

Is purchasing real estate with no money down really possible?

The quick answer to this question is yes, but you need the proper training and understanding to do it properly. If you have no cash at all and think like an investor who has no cash, you will have one of two options: give up, or be creative. Choosing to be creative means you will always find a way into purchasing real estate with no money down.

The key idea with purchasing real estate with no money down is investing without any of your own money. Someone’s money is going to be involved, but it doesn’t have to be yours. There have been instances of new investors coming up to me and saying that they have $100,000 in the bank and want to invest. My answer to them? Put their money to the side, and learn how to do deals with no money at all.

Here’s the problem with money: it kills creativity, which is essential in this business. Purchasing real estate with no money down spurs on creativity! If you always rely on your cash on hand, you’ll find that you have no cash and can’t move forward without selling a property. You need to work on the ability to do deals with no money at all, allowing you to keep that cash as a fallback if things go wrong, which makes your position even stronger. The value of a BBC (Big Bag of Cash) should not be underestimated!

Purchasing Real Estate with No Money Down should be rephrased as none of YOUR money. So, here are some ways to do that:

OPM (Other People’s Money)

Purchasing real estate with no money down means using other people’s money. Find a private investor for purchasing and fixing up a property. When you do this, you need to get an excellent deal on the property because you need to ensure that you have plenty of cash to cover the purchase, closing, holding, and rehab costs. Once that’s done, you can put the property on the market or refinance it – something that I do all the time.

Owner financing

An individual seller will likely be open to this if you offer a short term, allowing the to earn more profit.

Purchase “Subject to” Existing Loans

This is another type of owner financing and can be a great way to get into purchasing real estate with no money down.

There are other ways – these are just a few!

Are all your bases covered?

Though the cost may not come from you, there must be a source for the capital needed to rehab a property. You need to find an investor who will fund these costs so that you can start purchasing real estate with no money down. This is much easier than you think. Be sure that you have a source for the capital that you need before you buy a property.

Is this Ethical?

The question of whether purchasing real estate with no money down is ethical is answered simply. Absolutely! You may find this hard to believe. Many people feel like we are taking advantage of someone when we buy cheaply, but that is just not the case. I felt this way too – if someone was asking $80,000 and I offered $60,000 I felt badly about it. That changed when a few of these offers were accepted; The sellers were happy to have a buyer, and even at a lower cost I was still solving a huge problem for them.

As an example, I recently had someone sell me two homes that were worth a combined $100,000 for $29,000. As we closed the deal she was crying – not tears of sadness, but of joy that I took these problem homes from her. It was at this moment that I realized what a motivated seller was, and the valuable service I provided to them – all while purchasing real estate with no money down.

Am I a Home Stealer?

No. If the seller accepts my offer, they clearly were unable to get a better deal elsewhere. The reason they are willing to sell for so little is because no one else would buy it. I buy many homes from financial institutions and government agencies. They know what they are doing and would get more for their homes if they could. Would you feel bad if a bank sold you their home for 50% of its value?

This is all part of the business. You’re being paid for your knowledge of purchasing real estate with no money down and flipping that property. You are helping people who are locked into properties that they can’t get anyone to buy and you are also helping investors by providing them with an opportunity to earn money. You are helping the community by renovating a home that would be sitting empty, and eventually helping a family get into a nice home. I would contend that not only is purchasing real estate with no money down ethical, but when it is done properly it provides many individuals with many benefits and provide a much needed service.

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Know more about investing by reading about purchasing real estate with no money down.