| If you've read my article "Purchasing Property With No | | | | willing to take $88,000, you'll give him his entire asking |
| Money Down. . ." today's article may seem a bit | | | | price of $100,000 with very special terms. Although |
| conflicting. Bear with me, though, and you'll see that it is | | | | you amortize the loan over 30 years, you promise him |
| not. In Purchasing Property With No Money Down. . ., I | | | | that you'll pay him off in three years or less. Meanwhile, |
| explain how buying up property at inflated values at a | | | | you'll pay him interest only payments on the note at 8 |
| break-neck pace is no way to be successful in real | | | | or 9 percent. Explain to him how he'll make all of this |
| estate. I explain how this is a form of investment real | | | | money on top of the $100,000, because you're not |
| estate finance that is possible but not advisable. In this | | | | paying down the note with your monthly installments. |
| piece, I'd like to express that buying property with no | | | | Because you're giving him such a great deal, you will |
| money out of your pocket can actually happen and | | | | not pay him anything as a down payment. |
| can be a great technique, if it's done properly. | | | | Now, you may be thinking this doesn't look like a good |
| Let's suppose you find a house that you're interested | | | | deal for you. Here's how you make it a terrific deal. |
| in purchasing as investment real estate. The owner, | | | | The second you close the deal with the seller, you |
| who also uses the real estate as investment property | | | | stick a for sale sign in the yard, announcing that the |
| wants to get out quickly. This is a perfect opportunity | | | | "Owner will finance." Now, you sell the house for |
| for you to get the house with no money down. Note, | | | | $110,000. You take a $5,000 down payment, and you |
| look for ads that say seller financing or motivated | | | | take interest-only payments on $105,000 at 8 or 9 |
| seller to find these types of deals. | | | | percent interest. You are making more than you have |
| In lieu of conventional bank financing, you may offer | | | | to pay the seller, plus you have the $5,000 in your |
| the seller his exact sales price, if he agrees to finance | | | | pocket. This is truly a sweet, No Money Down |
| the sale for you. Before going this route, ask him if he's | | | | investment real estate deal. |
| willing to take a considerable amount less than his | | | | NOTE: if the seller insists on a down payment, you |
| asking price; if he's motivated, he'll likely say yes, | | | | offer him the $5,000 you plan to collect from your |
| assuming he's going to get a bank check. Now, you | | | | buyer. Be sure to get him to allow you to defer the |
| come in with much more money, but you ask him to | | | | down payment for three months. This gives you time |
| finance the loan. | | | | to sell, collect the 5k and pass it along to him. This isn't |
| Here's where salesmanship is critical. Offer him a deal | | | | as sweet as pocketing the $5,000 yourself, but it's still |
| that he can't pass. If he's selling for $100,000 but was | | | | a no money down deal. |