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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  • Nick Barlow
    Warsaw, IN · Member since 2017 · 229 posts · 270 votes
    5y

    @Matthew Grisafe right before COVID, I was working with my local bank to do a cash-out Refi so I could free the funds for a triplex I had on contract, and they offered to cross-collateralize the equity I was trying to cash-out.

    The net result was 0% of my cash down. Whether that meets the criteria of your question is an open point-I committed equity equivalent to a 25% down payment.

    0Reply
  • Esteban Jimenez
    Flipper/Rehabber · Seneca, SC · Member since 2018 · 50 posts · 39 votes
    5y

    @Matthew Grisafe

    I used a USDA loan in SC which means you are able to pay down 0% and there are also ways to pay 0% on closing but I did not go that route since the market is HOTT. People want money fast and getting approved for the closing cost would have taking longer for me to close.

    1Reply
  • Anthony Torres
    Real Estate Consultant · Saint Petersburg, FL · Member since 2020 · 26 posts · 10 votes
    5y

    @Matthew Grisafe I’ve never seen that, but I have a friend in the DFW area that did a piggy back 20% mortgage to make down payment. In a round about way that was 0 down. Kind of interesting

    0Reply
  • George SkidisPro Member
    Rental Property Investor · Belleville, IL · Member since 2017 · 875 posts · 529 votes
    5y

    We bought a nine family apartment building for nothing down. Bank financed 80% for 20 years. Seller financed 20% for 10 years.

    Walked out of closing with a little over $6,000 in rents and deposits on day one.

    Seller had a financial hiccup and we were able to negotiate a reduced payoff saving over $2,000 around 4 years and 3 months after purchase. 

    We owned the property a little over sic years. In that time we used the rental income to do minor rehabs. We also raised rents substantially.

    The property sold a little over six years later and a nice profit was made by all.

    1Reply
  • Lien VuongBusiness Member
    Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
    5y

    VA Loan offers 0% down with no PMI

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  • Lulu Masters
    Edmond, OK · Member since 2021 · 5 posts · 2 votes
    5y

    @Austin Hancock I also live in the edmond area. I’m only 14 but I’m preparing for when I’m 18 to invest in my first property. Do you know ways to make money around here? Or ways to find work?

    2Reply
  • Jim Spatzenfeld
    Investor · NorCal · Member since 2015 · 281 posts · 240 votes
    5y

    Even better: I bought with zero down and got $15,000 cash back at closing. Got a house and $15k in cash! I used a hard money lender who put a lien against two of my other free&clear houses.

    1Reply
  • Jim Spatzenfeld
    Investor · NorCal · Member since 2015 · 281 posts · 240 votes
    5y
    Originally posted by @Lulu Masters:

    @Austin Hancock I also live in the edmond area. I’m only 14 but I’m preparing for when I’m 18 to invest in my first property. Do you know ways to make money around here? Or ways to find work?

    Nice plans for a 14 year old! You’ll be a millionaire by the time you turn 30!

    Do this:

    My kid just turned 18. A few months prior I added my kid as an authorized user on a couple of my credit cards that I have for over 9 years. I pulled my kid’s credit a few weeks after 18th birthday and voila: Creditkarma shows a score of 788 and a 9+ year credit history! So basically my kid now had credit since age 9. Learn these little tricks and you’ll be ahead in the investing game!

    2Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    5y

    @Joe Splitrock we bought one for just the closing costs of $700 so technically not 0% down but no down payment

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  • Corey Vandenberg
    Lender · Lafayette, IN · Member since 2018 · 3 posts · 0 votes
    5y

    Matthew grisafe, when you are ready to refinance, it’s good to find a lender who has several options: 

    Conventional in order to get best rate and terms until you max out at 10 mortgaged properties.  

    DSCR or "cash flow" or "just rent" loan - this may require more downpayment or equity or at least more proof of funds to show that you have "reserves" or extra money. But the positives are amazing: ignoring all other debts, the loan is based solely on the rent you intend to earn (and verified as possible in your area by the appraiser).

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  • Thomas Moran
    Rental Property Investor · Raleigh, NC · Member since 2019 · 85 posts · 32 votes
    5y

    @Matthew Grisafe my first deal was % down only because the HML said we only feel comfortable lending X on this. I then told the wholesaler I was going to back out of the deal unless they could get me to that number. Not because I was playing hardball, I truly just didn't have the cash at the time. It worked and I think I paid $900 at closing. 6 months later refinanced and actually got money back. It's possible, but not easy without a VA or USDA loan.

    0Reply
  • Rick Rascoe
    Rental Property Investor · Rensselaer, IN · Member since 2014 · 30 posts · 8 votes
    5y

    @Matthew Grisafe

    I have done two contract for deeds with $1 consideration. One is a 3800 sq ft 2 1/2 story that I seller financed for 20 years at 2% interest. I plan to rent each floor, but have recently been considering selling due to lack of capital and too many projects hanging. The other is a home over 2800 sq ft that we did a deal with for my son. He is converting the house to a duplex. Half of the garage was converted to a living area and he will finish the rest and live there for a house hack. It is a BRRR. We did a 1 year contract with the seller, a little over $100 per month payment (to cover his mortgage) with no interest, and all payments going toward purchase price. We did pay some closing costs at the title agency, but no realtors were involved, so the costs were minimal.

    0Reply
  • Ryan Gajewski
    Rental Property Investor · Hebron, IN · Member since 2020 · 6 posts · 1 vote
    5y

    I bought my first primary residence with 0% down, using a usda loan.

    1Reply
  • Lance Jorgenson
    Investor · 84123 · Member since 2020 · 50 posts · 27 votes
    5y

    I was able to buy a Commercial Property where it was owner financed at 0% down.  I bought it from them by building a relationship with the owner and found out that they would prefer owner financed to avoid capital gains and to spread out the income to support the life style. Win Win

    2Reply
  • Jill Iwanski
    Rental Property Investor · Marshfield, WI · Member since 2019 · 18 posts · 37 votes
    5y

    We have purchased our entire portfolio of 58 units in less then 4 years without investing a single dollar out of pocket. 1st property (4 units) we borrowed the down payment for in-laws on a 5 year note (property cash-flowed it back in 2.5 years). 2nd property (2 units) cash out refi the 1st for the down payment. 3rd property (28 units) cash out refi the 1st & 2nd tied with a land contract. 4th property (24 units) the seller carried the paper on the down payment for 5 years tied to a commercial bank loan.

    2Reply
  • Casey C.
    Rental Property Investor · IN · Member since 2020 · 46 posts · 41 votes
    5y

    @Matthew Grisafe No money down means no skin in the game. No thanks!! I've never bought anything with no money down and I would never sell for no money down either. You need to have skin in the game.

    0Reply
  • Timothy W.
    Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
    5y

    I have.  I don't recommend it unless you're doing it intentionally with plenty of cash on hand.  I did it because I didn't have cash and real estate makes it very clear very fast that you need cash.

    0Reply
  • Hersh ShahBusiness Member
    Realtor · Atlanta, GA · Member since 2016 · 117 posts · 78 votes
    5y

    @Matthew Grisafe I have come very close to paying $0 on our first purchase. We bought a new construction townhome as a primary residence. By using the preferred lender, we were able to take advantage of $7,500 towards down payment and closing costs. My wife qualified for a state program for being a health care worker which gave her a 2nd mortgage loan of an additional $7,500 at 0% until 1st was paid off. Our only out of pocket costs were $1,000 which was the earnest money!

    We lived there for a year and it now cashflows right around $6,000/yr as we moved on to property 2 with a similar strategy. 

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  • Eugene Tan
    Rental Property Investor · Boston, MA · Member since 2020 · 10 posts · 6 votes
    5y

    @Matthew Grisafe In most case it’s impossible. especially if you have a good deal and don’t want to miss this opportunity, for the most good bank (local bank) will require 20~25% down payment for commercial loan.

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  • Michael Ablan
    Real Estate Broker · Watertown, NY · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    @Matthew Grisafe Yes.  You need to find someone in a desperate situation that involves a lot of headache and risk.   Something that most people aren't willing to take on.

    Or find a friend/family who wants to help you out

    1Reply
  • Account Closed
    Rental Property Investor · San Antonio, TX · Member since 2019 · 18 posts · 9 votes
    5y

    @Matthew Grisafe I have bought two properties and refinanced my second one for $0 down. I have used my VA loan a few times now.

    You can do it too! See your local recruiter and travel the world. But seriously, almost anyone can join the National Guard (located in 54 states and territories) and enjoy the same benefits as the Title X military and get some cool training. Heck, they will even pay you to jump out of airplanes.

    Best of luck fellow investors.

    1Reply
  • Account Closed
    Rental Property Investor · San Antonio, TX · Member since 2019 · 18 posts · 9 votes
    5y

    @Logan M. Did you do a value add or was it appraised for much more than your negotiated price?

    0Reply
  • Jordan Woolf
    Flipper/Rehabber · Huntsville, AL · Member since 2019 · 117 posts · 57 votes
    5y

    @Matthew Grisafe I have had the seller finance the 20% down payment. I actually left closing with a check for my portion of the rent for the month.

    1Reply
  • Alan DeRossett
    Investor · Thousand Oaks, CA · Member since 2017 · 302 posts · 123 votes
    5y

    have bought 3 properties like that with zero down.
    1st was a condo that the builder needs to sell within 23 hrs to get his investors to reinvest in phase 2 of the development. we used a wrap-around all-inclusive trust deed I paid the Builder who carried the paper.

    number 2 I bought a 4 bedroom house in foreclosure using a partner with cash we had to close in 5 days to beat the bank foreclosure. I Refinanced 15 months later too but out the partner.

    3. A friend got divorced and tried to rent out his old house. Tenants were no paying so he wanted to let the bank have it. I talked him into a quick claim deed so his credit would not be hurt. I went to the property and told the deadbeat Tenants i Was the new owner and would be moving in so they left. I fixed up the property just for cosmetics and cleaning. then rented it out for a positive cash flow of $300. Would love to find more deals like those but deals like those are scarce. Real Estate Brokers keep the best for themselves. So just keep looking. My son just turned 26 and called me up to say he's just bought a condo using a Fannie Mae 3.5% loan plus he took the first time buyer Fannie Mae test and was credited with $5900 at closing so that's pretty close to a Low or no down. Always keep looking.

    0Reply
  • Nick Rutkowski
    Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
    5y

    @Matthew Grisafe

    I’ve bought a 4plex and a separate land parcel with a mortgage and a land contract in lieu of a down payment. I fixed the house , had the bank refinance my mortgage and added the land contract payment to my new mortgage. Pretty much 0% down, kinda, sorta.

    1Reply
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