Turn the Television on any Sunday morning and you’ll find yourself in the middle of a “how to buy real estate” infomercial. Can you really buy a house with no down payment? Can you really make thousands or millions of dollars buying real estate. Of course the answer is “yes” and “no”. The real question is, are you willing to pay anywhere from $500 to $5000 for the information, classes and hotline? Most important are you self disciplined enough to follow the program.
Before you spend money on these expensive programs, here are my
top ten “no money down” ways to buy real estate. If you’re self disciplined and
willing to hear the word “no” many times before you get a “yes”, then maybe you
can buy a house without a down payment.
1. First is to check out the many
new zero down programs now available from lenders. Especially if you’re a fist
time buyer. Also FHA and VA have loans that may not be zero down, but are very
2. Borrow money for the down payment – Borrow the money from
family, friends or a business partner at a high interest rate or a percentage of
the profit when the property is sold
3. Raise the price and lower the
terms – Offer the seller more than he is asking provided he is willing to accept
the down payment in the form of a note. If the seller is asking $150,000 with
$15,000 down and willing to carry the balance of $135,000. Try offering $155,000
in the form of a promissory not instead of cash. The seller gets a little more
money for the additional risk.
4. Borrow against a life insurance policy – Many life insurance policy’s let you
borrow against the policy for the purpose of investing in real estate or other
5. Use other property as collateral – Create a note on
existing property that you or a partner own and use it as the down payment for
the property you are buying.
6. Home equity loan – Home equity loans are
generally easy to qualify for as long as there is adequate equity in the
7. Seller refinance – Have the seller refinance the property,
receiving the cash he needs from the proceeds of the new loan, the buyer gives
the seller a note for the balance of the seller’s equity.
8. Find an
investor – There are many people who have money but no time. Their current
profession keeps them too busy. Work out a deal where they put up the money and
you split the profits when you sell.
9. Lease with option to purchase –
Lease a property with the right to buy it at some future time. Provide for the
rental payment to be credited towards the down payment if you decide to exercise
10. Give them something they need – If the seller is
planning to purchase something in the future that you own or can buy, use it as
a trade. This can be anything such as furniture, boat or motor
by Richard Massey
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