Lending for Down Payment?

[Jared Cross]

I am seeking information regarding the possibility of obtaining down payment assistance when the property owner is also providing financing. Is such assistance typically available in these scenarios?

[Doug Smith]

I've seen several crashes in 34 years. The first to lose money in a downturn are the ones that either 1) overleverage as investors or 2) decide they want to be lenders and start lending out 100% financing, lending EMDs, or lending down payment. If you look at this chart, the biggest crash we've seen was a 19% drop from top to bottom. If you put down 20%- 25%, you still have equity. If you go in at 100%, you're upside down and you become one of the "statistics" we saw that were "cash flow negative" and, since they were upside down so badly, they had to short sell or, worse, do a deed in lieu or foreclosure. If you want to mess up your future, start overleveraging or lending at high LTVs. I've seen it sink so many people over the years. As a side note, I think you'll find that all of the advocates of 100% or near 100% financing have gotten into real estate or lending since 2007-2008. Once you see and live through a crash, you'll look at the world with wisdom and not put your hand on the hot stove again. I wish you well in your investment journey.