We talk about no money down rather chivalrously, don’t we? I mean, there is this guy I know — I think his name is Brandon something (wears the same shirt every day and really needs to shave that dead animal on his chin) — who wrote a book on no money down.
I am not much better, with a course teaching people how to be creative…
This is some hard stuff, y’all. This is risky, and it is difficult, and there are more caveats to NMD than hairs on Brandon’s face (that’s a lot). Trying to boil this stuff down to a few key elements is not easy, but let’s give it a shot!
How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties
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Take Care of Your Financial House First
If you’re going ask people to give you money, you must know how to run your financial life, meaning income minus expenses is a positive number. If you are living off credit cards, the worst thing you can do is take money from someone.
Simple as that!
There is No Such Thing as Free Property
This really makes me laugh, but once in a while someone still asks me if property could be bought with no money. Let me spell this out, just to be sure we are on the same page:
In our economy, currency is the medium of exchange. If you are going to gain ownership of property, most of the time you’ll have to pay money. Yes, you can control property without title transfer, and you can do some other creative things. But, by and large, you’ll have to pay money for the purchase.
This being said, if the money is not yours, it is someone else’s. Whether it’s owner financing or any blended third party financing, it is someone else’s money you are looking to finance your deal. That’s why we call it “creative Finance.”
I hope you are not a schmuck that no one wants to give money to — are you?
Let’s be logical here. You are not a big time operator. You don’t have an investor database to fund your deals. What you are is a young start up with a good deal, and you need someone who likes and trusts you enough to throw you a bone!
Dude, this person will be your relative (Brandon’s dad gave him his start by investing with him in that 24-unit), a co-worker who respects you, or a business client who is satisfied by you, etc. Are you seeing the picture?
Now, if you are not someone who is liked and trusted by people, then think twice about how you live your life. Similarly, if no one in your inner circle can write that check, then re-evaluate the people you hang with.
Underwrite Like a Pro
OK, even if people like you and are not opposed to helping you, they won’t do it to their own detriment. You have to make reasonable proposals in order to have a chance at hearing a “yes” on occasion.
Well, to make reasonable proposals, you have to know what the hell you are doing — plain and simple. If you don’t, study!
I know all of the above is simple. But truth usually is simple!
Do you use no money down strategies to buy real estate? What do you think of the above advice?
Let me know your thoughts with a comment.