Buying property without large down payments

14 Replies

Can someone explain how to go about buying properties without dropping a large down payment? I'd actually like to learn about buying without putting any money down, if this is really possible. Is this called seller financing? How does it work?

Sorry about all the questions.

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I have been reading a bit more about owner financing. Thanks to everyone for the help. Owner financing is easier than I initially thought, but apparently it is just tough finding someone who would be willing, right? By easy, I mean the process. The difficulty comes with finding someone willing. Sorry to repeat myself here.

Originally posted by "Darryl":
Can someone explain how to go about buying properties without dropping a large down payment? I'd actually like to learn about buying without putting any money down, if this is really possible. Is this called seller financing? How does it work?

Sorry about all the questions.

Hi Darryl:

If you contact me directly on Yahoo Messenger I can get you started.

id is bj_gibbons

All the best,

Brian

Do you own your own home now? You could use a HELOC to help with the down payment for investment properties or finance them entirely, depending upon your available equity.

Or, if this is your first home, you could use an 80/20 loan where the second is a HELOC. As you pay the HELOC down, there's money you can use for a down payment.

There are plenty of 100% financing programs available, but the more properties you own, the more difficult it gets to get approved for a loan without at least a small downpayment.

oh, why didn't ya just say so? :goofy:

Some have used credit cards also. This is risky but may be worth it....

This is an old post and the OP is probably long gone, but it is still a common question that newer investors will have. The TV and guru seminars will tell you that it is easy to amass millions without putting any of your money into deals.

Times have changed obviously. Some investors are able to buy with no or little money in a deal, but this is very uncommon for a new investor.

Even if you can arrange seller financing most seller's want to see some money down. Lenders have strict requirements so that they limit there risk of loss. An investor that has skin in the game will be less likely to just walk away when things get tough.

If your deal is good enough and you have something to offer, you might be able to get 100% financing. You might also be able to get partners.

"Nothing down" deals are all over the place if you know how to market for them. There are tons of people that would love to dump their property on you right now with little or no equity position. The trick is finding these folks that are willing to trade equity for peace of mind and to procure deals with REAL positive cash flow. This is EXTREMELY hard to do without investing any money.

Hi,

Other than seller finance, there is one other way to buy a property without 20% down. I am thinking of HomePath loans sponsored by Fannie Mae. Their investor loans only need 10% down. However the choice of properties is limited :( Another option is FHA loans, but those are for owner-occupied properties only, and there is a limit of one FHA per person usually.

-Mo

Another option is to have the 20% down already, and have the seller take back a 2nd mortgage for 15%-20% of the purchase price.

The key is working with a small local bank where you have a good relationship and fully disclose what you're doing.

- Tom

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