Updated over 2 years ago on . Most recent reply
Creative Financing for next deal
The ink isn't dry yet on my closing and I am ready to buy my 3rd investment, but I need to know how to go about strategizing the next deal.
I did a refi cash out on my 1st investment to buy this 2nd home out right, is this the smartest way to continue to buy or does anyone have some ideas? How does the no money down really work bc from what I see, you need some $$ down to do anything, for conventional anyways.
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By what people generally mean by 'no money down,' you did a no money down on your second purchase. You took none of your savings to finance that purchase. 100% of the purchase money you borrowed against your property that had equity. You came to the table with no money.
Another way is if someone (like a partner) brings the down payment money. You might own half the deal without bringing your own money. You would get in on the deal without you making a down payment.
Another way is to pay cash (your own, or a hard money lender, or a family member's) for a fixer-upper. Put in some more money to make repairs and improvements. You try to make the After Repair Value (ARV) high enough that when you go to the bank to get financing on the house you own and have repaired, they are willing to loan you as much or more than what you put in. When you close on the financing you should have no money (or very little) left in the deal. In that scenario, you own a house with no money down. This web-site, and David and Brandon's podcast is packed full with information and examples of this method (BRRR.)
Best of luck to you.