Have you ever bought property at 0% down?

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Have you ever bought property at 0% down?

Matthew Grisafe
Realtor · Kansas city, MO/KS · Member since 2021 · 18 posts · 7 votes

I’ve worked and helped a lot of investors buy and sell in the KCMO area, but have yet to find one that has been able to finance one at 0% down and I wanted to hear your thoughts and ideas on what methods you use to buy and hold properties, and if you have ever bought a property at 0% down? If so please share!

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Stephen KeigheryBusiness Member
Rental Property Investor · New Orleans, LA · Member since 2018 · 716 posts · 555 votes
5y
Originally posted by @Matthew Grisafe:

@Stephen Keighery so you just assumed there loan and took over payments. How did you find that deal?

Technically it's not assume as that would mean the bank changed it over to my name. The loan is still in the old owner's name but I pay it. The title is in my name. I do a lot of marketing, direct mail and online. Don't remember where this one came from specifically.

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  • Cassi Justiz
    Rental Property Investor · Edmond, OK · Member since 2017 · 1k+ posts · 1k+ votes
    5y

    I haven't personally, but we have a lender locally that will do 100% financing up to 70% ARV. We've offered on a few deals that would meet that criteria but haven't been able to lock one down just yet.

    3Reply
  • Bruce C.
    Seabrook/Galveston · Member since 2018 · 274 posts · 178 votes
    5y

    Hard money lender, rehab, ReFi. The 2 I've done so far, no money down on the first one, about 5-10% on the second because the ARV came in a little low.

    2Reply
  • Stephen KeigheryBusiness Member
    Rental Property Investor · New Orleans, LA · Member since 2018 · 716 posts · 555 votes
    5y

    @Matthew Grisafe I have bought a house subject to the mortgage. The purchase price was the balance of the mortgage which I now make payments on. It was nothing down but I did pay the closing costs.

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  • Matthew Grisafe
    OP
    Realtor · Kansas city, MO/KS · Member since 2021 · 18 posts · 7 votes
    5y

    @Toni Jones what kind of loans do you guys provide for your investor clients?

    0Reply
  • Matthew Grisafe
    OP
    Realtor · Kansas city, MO/KS · Member since 2021 · 18 posts · 7 votes
    5y

    @Cassi Justiz what’s the name of the lender you use?

    0Reply
  • Matthew Grisafe
    OP
    Realtor · Kansas city, MO/KS · Member since 2021 · 18 posts · 7 votes
    5y

    @Bruce C.what conditions where the properties you got 0% down on?

    0Reply
  • Matthew Grisafe
    OP
    Realtor · Kansas city, MO/KS · Member since 2021 · 18 posts · 7 votes
    5y

    @Stephen Keighery so you just assumed there loan and took over payments. How did you find that deal?

    0Reply
  • Stephen KeigheryBusiness Member
    Rental Property Investor · New Orleans, LA · Member since 2018 · 716 posts · 555 votes
    5y
    Originally posted by @Matthew Grisafe:

    @Stephen Keighery so you just assumed there loan and took over payments. How did you find that deal?

    Technically it's not assume as that would mean the bank changed it over to my name. The loan is still in the old owner's name but I pay it. The title is in my name. I do a lot of marketing, direct mail and online. Don't remember where this one came from specifically.

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    5Reply
  • Bruce C.
    Seabrook/Galveston · Member since 2018 · 274 posts · 178 votes
    5y
    Originally posted by @Matthew Grisafe:

    @Bruce C.what conditions where the properties you got 0% down on?

     One was in good shape, the other took a lot of work, at least by my standards. 

    0Reply
  • Austin Hancock
    Investor · Edmond, OK · Member since 2020 · 6 posts · 4 votes
    5y

    I have financed with 0% down 2 different ways. Both due to the total buy, rehab being under 70% ARV. 1. the BRRRR method and 2. buying the property and rehabbing under the 70% ARV on a single standard (commercial loan) closing non cash close.



    1Reply
  • Patricia Taveras
    New Bern, NC · Member since 2017 · 246 posts · 173 votes
    5y

    @Matthew Grisafe

    Not sure if this counts for what you're looking for - but I purchased my second airbnb 100% financed because I purchased my first one at a good enough deal that my lender put a second lien on the first house to use as my "down payment" on the second property. I only had to cover closing costs at closing. This was a local bank using a commercial loan.

    3Reply
  • Elin Anderson
    New to Real Estate · NY · Member since 2019 · 9 posts · 11 votes
    5y

    @Toni Jones

    Military can get 0%down.

    2Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    5y

    Moderator note: No self promotion. This is directed at lenders. Saying "my company lends 0% down" is self promotion. Saying "I lend in these states" is self promotion. Use the marketplace to advertise your business. 

    Personal answer: I am about to buy a property with 0% money into the deal. I am doing a cash out refinance on two properties currently and some of that money will be used to fund the 25% down payment on the new property. I also have a property I purchased on my HELOC using 0% down. I realize neither of these is a true 0% down loan secured by the property I am buying, but those are two other strategies to keep your money out of the deal.

    3Reply
  • Logan M.
    Investor · Provo, UT · Member since 2016 · 759 posts · 626 votes
    5y

    I did a mobile home park 0% down last year in a great area and I did 5k down on a condo last year

    1Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    5y

    To follow up on what @Joe Splitrock pointed out -- I just did a 1031 exchange on a single-family to get 100% of the money necessary for an "all-cash offer" on a duplex.

    A more typical strategy we follow to make all-cash offers is to use our IRA and a local private lender we know. You can only do this once per calendar year with an IRA, so you have to make it count. Typically, we wait until right after Thanksgiving. Few things motivate a broke seller like a bleak, failed season of trying to sell a place and Christmas coming up. Snow on the ground is always a plus on the day we make our offer.

    If our offer is accepted, we get the money for the sale immediately out of our IRA while our closing company is checking the deed -- Vanguard writes and sends the check in a few days. We pay using this money, then go to our private lender for a short-term loan on the property, as you have to return the money to the IRA in 60 days. We use the private lender's money to pay back Vanguard.

    Once the buy is made and the money is back in the IRA, we have time to look for other means of financing to pay back our private lender. That financing can and has taken a variety of forms in the past.

    Just figured I'd mention this way of buying low-cost properties. Just as 0% down doesn't always mean someone is financing everything, all-cash doesn't always mean that no one is financing anything.

    3Reply
  • Patti RobertsonBusiness Member
    Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
    5y

    @Matthew Grisafe I've purchased pretty much my entire portfolio this way. You have to buy under market and have a short term lender willing to lend 100% for purchase and repairs. That's the BRRRR method in a nutshell. That said it is really tough to do in this market. I had the benefit of building my portfolio while I was a HomeVestors franchisee. Not only was I buying with equity, they lent at 100% for the purchase and repairs as long as I met their formula, which we always did. The key is finding a flexible shirt term lender and buying below market.

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  • Anthony Lewis
    Member since 2020 · 2 posts · 1 vote
    5y

    I am trying to purchase 300 units will be possible to get 100% financing

    1Reply
  • Mike Nelson
    Investor · Oak Park, IL · Member since 2014 · 307 posts · 150 votes
    5y

    In 1987 I bought a 3-unit in Chicago's Wicker Park for $67,000 with a assumable FHA loan. I paid the seller $275 a month on a second mortgage for his equity. There was no money out of pocket.

    2Reply
  • Josh C.Pro Member
    Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
    5y

    @Anthony Lewis

    No.

    Or at least not alone. Combined investors money and possibly not your own if you have lots of experience. Or super rich uncle or you are already wealthy is an possible option leveraging current assets.

    But for someone with limited experience and limited net worth that is blindly looking answer is a firm no.

    Sorry just doesn’t work like that.

    1Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    5y
    Originally posted by @Josh C.:

    @Anthony Lewis

    No.

    Or at least not alone. Combined investors money and possibly not your own if you have lots of experience. Or super rich uncle or you are already wealthy is an possible option leveraging current assets.

    But for someone with limited experience and limited net worth that is blindly looking answer is a firm no.

    Sorry just doesn’t work like that.

     Agree, just to elaborate... Loaning 100% of value is risky. If you default, the lender is getting back an asset worth AT MOST what they lent. In reality the process of foreclosing, selling, etc. will mean they take a loss. The lenders who do take the risk are going to charge a premium in fees and interest. Like anything, risk has a premium associated with it. Still it can be difficult with someone with no experience, because that adds additional risk. 

    1Reply
  • Giovanna Miller
    Rental Property Investor · New York, NY · Member since 2015 · 10 posts · 4 votes
    5y

    Yes, with a partner who funded 100% of the deal. She came in with the money and I put in the work. 

    0Reply
  • Corbin Charpentier
    New to Real Estate · Longview, WA · Member since 2020 · 3 posts · 0 votes
    5y

    I just closed on a property with no money out of my pocket. The only money used was for the earnest payment, which 100% came back to me. I negotiated the loan amount down and rolled in the closing costs.

    0Reply
  • Dave PoeppelmeierBusiness Member
    Realtor · Maumee, OH · Member since 2015 · 491 posts · 722 votes
    5y

    One good way to talk to someone about 0% seller financing is to talk about the tax advantages for them. If they sell a house (or group of houses), they have to pay capital gains on those for the current tax year. If they don't need the money immediately then they can spread that income hit across many years. 

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  • Prithvi Sri
    Member since 2018 · 71 posts · 50 votes
    5y

    Not now but back in the 2005 rush times, I did. Bought with 5% down and got my own 3% RE agent commission, 2.5% commission as  my loan agent.  So it was technically a cash out purchase but not a pure investor play. I had to throw in my broker and loan officer hats as well.

    2Reply
  • Luke G.
    Rental Property Investor · Hammond, WI · Member since 2017 · 139 posts · 217 votes
    5y

    Bought a portfolio of about 16 small multi's for around 1.2 million, seller provided 20% second and bank financed 80% (in 2017).  This was a small local bank that I had a previous relationship, I also had 80k come back at closing to start some renovations.  I'll likely never see another one like that nor would I want to, I took on some serious risk but it has paid off.  I paid off the 2nd with a refi and have the rest on a 7 year lock.

    3Reply
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