I have been calling apartment owners directly and have researched how to cold call and what to say. I found 2 owners that were willing to carry the financing. One is 2 (4) plexes but he was able to carry the financing because of due on sale clause. So I called banks to get a traditional loan.
I know there are creative ways for people to reduce their down payments when they get conventional financing through a bank but how? The lenders I called today do not allow the seller to pay any part of the down payment. I have also seen other people claim to get properties with no money down and the seller takes out a 2nd lien. And all these banks require reserves for all the properties they own. What are they doing that I鈥檓 not?
Real Estate Broker 路 Salt Lake City & Oklahoma City 路 Member since 2018 路 3k+ posts 路 2k+ votes
7y
Hey @Account Closed! Good work getting in touch with these owners and creating opportunities!
I suspect that most people doing "no" or extremely low money down on seller carry deals are working with sellers who either 1. own the property free and clear, therefore do not have a "due on sale" clause, or 2. are doing seller carry and not notifying their lender banking on the chance that the lender won't catch the sale and enact the "due on sale" clause.
Outside of owner carry situation the way you can do "no" or "low" money down in a deal is by buying it in a "lacking" state, adding value, and then capturing the value you added to the property by refinancing. If you have added enough value to the property that you can refinance and be "all-in" on the deal around 75% of what it will appraise at, then you should get all of your money back out of the deal, making it a "zero down" deal.
I hope this is helpful! Keep working hard to get with these sellers and make win-win deals happen!
@Will Fraser in regards to the down payment. How are buyers getting low or no down payments when they purchase through conventional financing? The banks I called will not allow the seller to pay for ANY of the down payment.
A guy on another thread was talking about how he purchases properties with no money down and the seller takes out a second lien.