Helping a friend get a no-money down home

[Brandon Turner]

This is a deal I am working on now. Not for myself, but for a friend. I thought I would post it to see if anyone had any comments or suggestions.

My best friend Adam was looking to cash in on this stimulus money thing and get a house, but has no money for a down payment, awful debt-to-income due to a high truck payment, but a steady (low paying) job and good credit. So we worked out a plan that we are in process of doing now.

I have done a few flips with a hard money lender, and currently have 4 notes with him that have a good deal of equity. So my friend Adam found a house in need of a good amount of work to be done and got in under contract for 29k. We are purchasing the home with three names on title -mine, Adam's, and his wife, with the hard money lender I use - including 15,000 for repair costs. Once we close, I will do the normal paint/carpet/etc to get it in good shape and Adam and his wife will move in. I will then Quit Claim myself off the deed, and he and his wife will then own this house for $50,000 total. He will then get a refinance (USBank and others offer a no-closing cost refi that is fairly simple) for $65,000 which will pay off the truck - leaving my friend with a house worth $90,000, a mortgage for only $65,000 and no truck payment - making his Debt-to-Income much more manageable and enter the world of a homeowner.

[Josh Green]

just to give more of my opinion, i'm a little bothered that he would have such a high truck payment and have no money to put down.

even if this 'deal' works, he will then have a mortgage payment, no truck payment, and no money.

he needs to make some living adjustments. i dont think he should be buying a house. he needs to pay off the truck and sock $$ away. budget, budget, budget!