Does the 'no money down' concept really mean No Money Down?

11 Replies

Hello people . I have heard this notion of flipping a house with no money down. Now does no money down, actually mean absolutely no money down, or does it mean something else? Can I actually flip a house and make profit, paying literally nothing, except the time I invest in finding the deal and a buyer?

Well, you could, if you found an investor with money. There's no such thing as "no money used", but you might be able to do deals without any of your *own* money. 

My experience: you need skin for this game. "Low" would be more likely than "No". 

@Michael Okechukwu Can it be done?  I'm sure you'll find some people around here with stories like that.  And some of those people will want to enroll you in a nice system, coaching, etc. program between $500 and $50,000  to teach you how to do it.  Realistically, you can do things like assigning a contract with very little money down.  However, you do run into issues of how you find the property to get under contract.  There's a reason that people will send 5,000 yellow letters a month out, it beats the heck out of banging on 5,000 doors or calling 5,000 owners in different states that own in one area.  And if you do bang on 5,000 doors you're probably going to spend a chunk of money in gas.  Like with a many sales techniques you don't get a good sample size (and won't likely find success) if you just target 50 homes.  You could do that with your own time (easily) but odds are you won't be successful.  Not because of *you* but just because of conversion ratios (pesky math).    

Some of the "no money" conversations and strategies also depend how liberal you are (shades of @JD Martin here) with defining your "own money".  Some people consider a loan from the bank using "other people's money" or a credit card advances as "other people's money" but really it's your debt that you owe, interest you will pay, etc.  So even using "other people's money" is seldom as "free" as radio ads would like you to think.  

Question now becomes how does one like myself with no real estate experience or capital find an investor/buyer that will do business with me, especially when they don't know me personally?

1. Can it be done?  Yes

2. How can you do it?  You will need to know what a true investment deal looks like, find a deal and take that deal to an seasoned investor to put it together and share the profits from the deal with you. 

Originally posted by @Michael Okechukwu :

Question now becomes how does one like myself with no real estate experience or capital find an investor/buyer that will do business with me, especially when they don't know me personally?

Your best answer may be to slow down and solve some of your "deficiencies". Keep studying, learning, analyzing deals to gain knowledge. Start saving some money up in the meantime so you at least have some available cash. Most importantly, get to know some of the investors with capital. Go to your local REIA, introduce yourself. As you get to know some of the folks offer to trade some free labor/time to be able to shadow them and learn from them. Once you spent some time around these folks and they start to trust in your ability they'll be more interested in possibly partnering with you.

I personally think it is Baloney.  You are ALWAYS going to spend $ to find deals...   whether it be gas, marketing etc..

Like it said above.. all this no money down stuff depends on your finding a deal sweet enough that someone else will lend you their $ to run with it... BUT that person is going to want a lot of due dilligence... in REI due dilligence costs $. Are you going to go into a meeting and not have a pest/ roof/hvac report on this house you have under contract? Well those cost $... How are you going to get a cash ddeal house under contract if your accounts show no or little $...? It all costs... anyone telling you different is selling you something. MAYBE wholesaling can be done no $ per deal... but they spend a LOT finding those deals... websites, bandit signs, etc...

Thanks, @Andrew Johnson and @Paul Bowers You both provided answers to a situation that is similar to mine. 

Thanks for asking this question @Michael Okechukwu - I would definitely look into shadowing others and trading labor for time and knowledge. 

Breaking bread can also be a good way to get a feel for someone and start a working relationship.

It can be done by experienced investors with a solid track record that will attract other investors to them.

Can it be done by you......highly unlikely to no way in hell.

Money makes money, those looking to get in with nothing to offer but hopes and dreams are a dime a dozen and usually fail miserably. 

Investing in real estate is primarily a method to grow wealth not create wealth.

No money down makes me flinch every time.  There is no such thing.  Consideration must be exchanged for a real estate transaction to even be legal.  Consideration is money.  No money, no transaction. It is guru speak. Click bait.  Crap.

That said, every investment I have ever made has net resulted in all of my money coming back to me.  Sometimes it takes 10 years, but were all of my investments 'none of my own money'?  Yes, eventually.

Not having money is a symptom of other factors.  Most adults don't just wake up broke.  Sell the car payments, brew your own coffee, learn to love pb&j, get a 3rd job.  Network and educate yourself while you focus on changing your trajectory.  Glad you're here!

Thanks guys. Real candid thoughts. Much gratitude.

I personally have had to always market for my deals. I know a couple of people with no money craigslist deals. I think craigslist luck only goes so far.

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