Is No Money Down Really No Money Down?

8 Replies

So I have been studying more and more into creative financing and different ways to purchase properties with a low amount of cash needed. I have also noticed that a lot of people want to get into real estate with a very low amount of cash for the entire process. As I have been looking more and more into it, I have come to find out that going into purchasing a property will require some sort of your own cash at some point including attorneys, appraisals, inspections, etc. 

Has anyone actually been able to have these costs covered or not needed or am I right about actually needing cash for this?

I bought a duplex in May and paid $0 at closing due to value being higher than the sale price.  All closing costs were rolled into the loan.  Only thing I paid out of pocket was the $600 inspection.

I used a short term (2 year) loan through a small, local bank I have been building a relationship with.  I am in the process of refinancing into a 30 year fixed now.  It's more expensive to do this way due to the extra closing costs, but I haven't found a fannie mae lender that is as easy to deal with as this local bank.  They make closing deals quickly very easy.

@Larry H. that's interesting! I'll definitely have to look into more small banks in the area! Was it with a portfolio lender?

New investor and investors who wants to leverage as much as possible.  The "no money down", is really not an accurate statement.  Investors are looking for none of their money down.  Lenders do not like to make deals with people who have not skin in the game and try to limit their exposure.  When the economy was weaker individual property owners were more inclined to do these types of deals.  They do exist, but it is rare for someone to have a portfolio of them.

It is possible however you always need money to make money.

I do no money down through the combined use of seller financing and HELOC but the reality is that I have the money to back the deal

The more money you have the less money you need.

When you are first starting out the "no money down gurus" are selling snake oil.

I have bought many properties with no money down.  For example, I just bought 11 vacant new house building lots. I borrowed the entire amount from an acquaintance. No money down. I pay him back within a year.  I also bought houses from individuals with no money down. Just start making payments to them.

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