Zero Down Real Estate Investing

Zero down? Why would a seller want to walk away from closing with nothing? Well, they wouldn't, and that brings up the most important point about real estate investing with no downpayment: The seller almost always needs cash at closing, but it doesn't have to be YOUR cash.

A Zero Down Example

I'm selling a small rental property right now, with payments of $400/month. The buyer has a good credit report, and the $5,000 downpayment covers closing costs and even a foreclosure, if necessary. So at this point, I don't care where he gets the downpayment. A $6000 cash advance on a low-interest credit card for example, would cost him about $135 per month, and give him enough for the downpayment and his closing costs.

In this case, with rent around $600 per month, he would be okay. In some cases, however, that extra $135 might cause negative cash-flow. So be sure that however you do it, the numbers work. By the way, I would have set the payments at $350, if he had asked, because it's the price and the interest rate that are important to me.

Other Zero Downpayment Methods

While there are sellers (like myself) that are able to offer terms and low downpayments, usually you have to find a way to get at least 70% of the price to them in cash. Think in terms of how to get a primary loan, then how to raise the money for the remainder. A couple examples follow.

Some banks still do "no doc" loans, meaning they don't require verification of income, source of downpayment, etc. They generally loan only 70% to 80% of the property value, but if the seller is willing to take a second mortgage from you for the other 20% to 30%, you are in with no money down. The seller gets 70% or 80% in cash, plus payments for years to come. You'll have two payments, of course, so be sure the numbers work.

You can borrow against your home or other property to come up with downpayment money. If you borrow for a "vacation," and leave whatever you don't spend in your checking account for a while, you can use it without violating bankers rules about borrowing for a downpayment.

Even if you live in a small town, there are usually a few "note buyers." These are investors that buy land contracts, mortgage loans and other "notes" at a discount. If a seller takes a purchase money mortgage from you for $100,000, for example, a note buyer might pay him $85,000 for it. So how does that help you or him?

An example: A seller prices his property at $195,000, and expects to sell it for $180,000. You offer $205,000 in the form of a mortgage for $160,000, and another for $50,000. You have arranged for the sale of the first mortgage at closing for $136,000 to a note buyer. The seller gets that cash now, plus payments from you on the second loan for $50,000. Notice that this adds up to $186,000, which is more than he expected to get out of the deal.

These are just some of the ways you can buy with zero down. Real estate investing is about making the deal work for all parties. Find a way to get what you want, and get the seller what he wants. That is more important than having big cash on hand.

Steve Gillman has invested real estate for years. To learn more, and to see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com

---

Dubai or not to Buy? A Short Assessment of the Dubai Property Market

Never has there been such an ambitious and creative drive... Read More

Why Move to the Poconos?

Awaken to the sounds of softly rustling trees and tranquil... Read More

Home Buying: Things To Keep In Mind

So you've decided you want to own a home and... Read More

Flipping Houses for Gold: Three Tips to Help You Find the Perfect Fixer

Many real estate investors enjoy "flipping houses," or buying and... Read More

Youre Not Paranoid: The House Really Hates You

If you've just bought a house, you may be able... Read More

Real Estate Negotiation Secrets

When you bought your home, you offered less than you... Read More

Apartment Loan 101

So you're interested in going into business as a property... Read More

10 Easy but Essential Steps for Home Selling Success

They say that the whole process of selling up, buying... Read More

Florida Investment Real Estate and What Are Considerations Before Buying

Investment Real Estate, First Things FirstConsidering investing in property? What... Read More

The 21st Century Way To Build Equity

Here to stay and firmly established in the U.S. mortgage... Read More

Questions To Ask The Landlord Before Renting His Apartment

Apartment hunting is not the easiest thing around. You may... Read More

Real Estate Tax Incentives

Lower Your TaxesTax incentives for real estate investors can often... Read More

California Home Seller Disclosure Duties

Property Condition - Seller's What to Expect During the Inspection... Read More

What is a Foreclosure?

A foreclosure is an action taken against a property owner... Read More

What?s Your Style? A Guide to America?s Most Common Home Styles

Styles of houses vary across the country. From the New... Read More

How to Make the Real Estate Market Work For You and Get The Most Money

How to make the Real Estate market work for you... Read More

The Professional Investors Plan

The art of using high-leveraged activities.Here I would like to... Read More

Maximizing Curb Appeal and First Impressions to Sell your Home

We all know that a home or property of any... Read More

Real Estate Investing Skill Acquisition

Real estate investing is not in any list of high... Read More

So, You Wanna Buy Pre-Foreclosures?

So you wanna buy pre-foreclosures? or at the courthouse steps?... Read More

Buying Foreclosures - Knowing Why Helps You Buy

One big potential deal-killer in buying foreclosures is the homeowner.... Read More

Becoming A Battle Hardened Real Estate Veteran Without All The Scars

Step 1 is always to determine the fair market value(FMV).... Read More

Join the Bulgarian Property Boom With Confidence

An Irish property investor in Sydney, Australia has created an... Read More

Selling Houses: Psychological Effects of Landscaping

Buyers think they care more about the inside of the... Read More

Maui Realtors: What You Need To Know

Maui is a great place for families of any size.... Read More

Buying Houses: Types of Bargains to Find

To make a good profit in real estate, you must... Read More

Lease Purchasing Is The Perfect Home-Based Business

Some call it the 30 second commute. We call it... Read More

Real Estate Investing and Home Ownership

If you already own your home, you will probably make... Read More

Real Estate Investing ? Finding Cheap Houses

Real estate investing expertise can certainly accommodate the luxury home... Read More

Grab Your Dream UK Home On The Cheap - Property Auctions

Did you know that every year thousands of UK properties... Read More

Real Estate Investing ? The First House Purchase

Real estate investing usually begins with the purchase of a... Read More

Selling Houses: Cutting Edge Design Tips for Selling

In this article, you're going to discover new techniques for... Read More

Buying A Home ? Zoning and Architectural Review Board Restrictions

When you buy a home, you need to be aware... Read More