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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  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    5y

    For what is worth, this line is just a really good seminar registration clickbait. 

    Who doesn't want something for free!?!

    1Reply
  • Jennifer Dunn
    Member since 2019 · 1 post · 0 votes
    5y

    @Cassi Justiz can you recommend your lender?

    0Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    5y
    Originally posted by @Nick Barlow:

    @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.

    Nice, Nick.

    Not to pick on your deal, but blanket or cross-collateralize clauses can be a tangled mess when you try to sell or refi one of the assets under the blanket.

    Matthew I agree with others that think the additional risk and hassle to obtain a 'O down' property often isn't worth the corresponding risk.  Much better to buckle down and save up some $. 

    Most of my deals end up being 0 out of pocket after a period of 3-10 years.  I once purchased a low value house with credit card checks with 0% promotion period but a 3% fee in 2006.   I've also done sub2 and LOs with low to no net consideration but it was a buyers market and you have to know what the frick you are doing. 

    it's hard enough finding good value in this market.  Don't get obsessed with low or no $ down on top of it. 

    2Reply
  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    5y

    "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."

    Louisiana must do stuff differently then.  Why does that NOT trigger a due-on-sale clause unless the bank is just stupid and not looking?  I assume you still have a trust deed on the house?

    0Reply
  • Robert Herrera
    Investor · Denver, CO · Member since 2015 · 492 posts · 267 votes
    5y

    @Matthew Grisafe

    This can be done with the right lender and the right seller!

    This works best with an expensive commercial property

    Lender gives 70% loan

    Seller does a mortgage (2nd lien pos) for the 30% remaining.

    Some lenders will, some won’t.

    0Reply
  • David Da Silva
    Real Estate Agent · Jersey City, NJ · Member since 2017 · 69 posts · 56 votes
    5y

    0% down? That's a loaded question lol, plenty of ways to do it though.

    USDA and VS are 0% style loans (but you pay closing costs).

    But If you're creative with the finances, you can technically make any deal 0% down.

    Here's a perfect example of one deal I just closed with one of my clients a couple weeks ago:

    Style: Triplex - (Found this one off market for my client, which works best because we have more negotiation power vs a market listing with multiple bids)

    Price: $389,000          Taxes: $11,950          

    Interest Rate: 2.5% Loan Type: FHA

    PMI: $320 per mo Insurance: $100 per mo

    Total monthly mortgage cost: $2900 per mo

    it was a 3x 3 bed 2 bath, so each respective rent was $1500 per mo (extremely undervalued rent for the area btw, we're gonna increase it to $2200 when renovated).

    So mortgage = $2900 - Rent of $3000 = -$100 (or $100 per mo rent cashflow).

    My client was basically getting paid $100 Per mo to live in the 3rd unit.

    Now the best part, the downpayment and closing costs: $25,000

    How did we do this? I had my client take out a loan on her 401k, then had the seller offer a $25k credit at closing so my buyer could pay back her 401k Loan.

    So basically, 0% down, 0% mortgage payment, and when she's ready to move out she'll be looking at an easy $1600-$3700 per mo in cashflow.

    This is one of my favorite strategies to employ.

    Hope this helps.

    1Reply
  • Dennis Wayne
    Member since 2020 · 339 posts · 356 votes
    5y

    Bought seller financed deals multiple times with nothing down , totally possible if you are a good negotiator . Not going to find those deals advertised or on the mls I assure that

    0Reply
  • Cassi Justiz
    Rental Property Investor · Edmond, OK · Member since 2017 · 1k+ posts · 1k+ votes
    5y

    I've had several people ask about the lender that I mentioned. It is First Security Bank out of OKC. They are a super small one branch local bank. They will only loan on properties in OKC and a few suburbs of OKC.  They are also super picky on the paperwork they require and investor criteria. 

    So I'm not sure if that's super helpful for anyone not in OKC. If you are in OKC, buying dirt cheap properties and have excellent book keeping, they can hook it up. 

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

    @Lulu Masters , @Jim Spatzenfeld is exactly right. At first your biggest hurdle will be credit or the lack there of.

    2nd " do you know ways to make money around here?"

    Start doing what every you can at your age like cleaning up neighbors yards, asking friends dads who own construction companies to do small jobs or sweep shops etc. That was my first "job" while growing up in construction and my friends tagged along. Edmond is great and the people are very willing to help you just gotta ask. 

    0Reply
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