10 WAYS TO BUY AN INVESTMENT PROPERTY WITH NO MONEY DOWN

95 Replies

Total newb here, just trying to gain some knowledge. Looking forward to everyones feedback! 

How can I execute the BRRRR strategy with no money or very little money down? I know this has been asked plenty of times, but I was hoping someone could help clarify some solid strategies. At first a standard FHA loan or a FHA 203K loan seemed plausible/ideal but from what I've researched neither of these are allowed for an investment property; nor do I want to live on the property for a year.

Would a hard money loan or partnership be my next best strategy?

I have used all of OP's list (or a variation of them), except #4 & #10 (in the future I will)... Even some that most investors have not done or used (to my knowledge).

This is evergreen content. Is this on a webpage of its own?

like Ryan said , (100% financing is possible with small local banks. My bank is giving me 100% of purchase price (including rehab money if the property is not ready to rent). Not a dime out of my pocket. All I have to do is keep it under 85% ARV since they are keeping the loans.)

I have been doing this one for about 15 years now, multiple banks , 15 and 20 year amortizations, 3 yr lock on interest rate. As long as i do my due diligence, renewal isn't a problem. I shoot for 70% ARV.

Thanks! I am working on my first deal and this information is extremely helpful. Thanks again 👍

Is anyone doing any of this in the pricier markets? Anyone in Seattle? 

Fine ideas but most are not feasible or doable. I think it's an idea to find an equity partner who can come up with the down payment for a private or commercial lender, with ownership of the LLC divided in some form.

The first 11 properties that I bought were all zero down in one way or another. 

90% bank financing, 10% private second

92% bank financing, 8% signature loan

97% bank financing, 3% signature loan

71% seller financing, 29% second mortgage on other property

66% mortgage assumption, 34% second mortgage on other property

80% bank mortgage, 11% seller credit, 9% signature loan

80% bank mortgage, 20% second mortgage on other property

100% signature loan

100% partner's funds

100% partner's funds

80% bank mortgage, 26% Section 1031 exchange, 4% seller credit

@John Stevenson Do you think these methods can also be applied to the other countries? Have you heard anyone who had done it there?

best advice ever! Motivated to start REIA in Sitka Alaska. Ready to listen, protect my investors and work work work!

Thanks again 

I have myself in a tizzy....I am born and raised in NY but world traveled. I have only assigned properties over on Long Island in both Nassau and Suffolk.  I was traveling back and forth to Florida in October of 2017 to see my Mom every week because she was terminal (not a pity thing I am getting there...), My mom died at the end of March 2018 and my dad died 3 weeks to the day after her (we weren't expecting him,...Doctors said a broken heart? It was and it was awful. I now live in Orlando as my full time residence and I cannot get myself to assign a property here EVEN AFTER my attorney and title comp said it was just fine...everything was in it's place!! I feel like a deer stuck in the headlight now. I did that one property and now I feel like I need a partner. Maybe because my teacher (taught my brokers class on L.I. ) was my partner but I'm being a big baby!! Any suggestions? Any partners? 

David Krulac...that was a long time ago

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#7 is the only one I would deal with. Be careful with over leverage using #10. #1 can work if you use an FHA to buy an owner occupant type of property, where you live in one of the units. You still have to put some money down.

Basically, real estate investing is not something for those who have no money.  Something will go wrong in your career.  Unforeseen capital expenditure.  Tenant doesn't pay and you have to evict them.  

Nice breakdown, eye opening. I would be interested to see how many people have had success with #4.

I've been successful at 100% financing (in a practical way) executing a BRRRR business plan through the combination of:

  • Private money loan (high interest, but refinance out after the rehab)
  • Personal loan or line of credit for the remaining balance (long term 2+ years, low interest ~5-6%, interest only)

This is a much more practical approach in my opinion, but is dependent on a few things:

  • good credit
  • not buying properties that would make my DTSR at a dangerous level...i.e. worse case scenario i can afford all payments
  • income that supports the previous point

Just began reading about the BRRRR method, thanks a lot for all these tips.

@John Stevenson I ran across this post at the exact right time for me.  Thank you for sharing! I hadn't considered requesting a installment plan for the down payment.

These 10 tips are all good and fine provided you do have liquidity and hopefully experience.  If you try these while strapped for cash or not being experienced in the business, you could run yourself into a headache.  Some more than others here.  

@Mary K. The seconds and the signautre loans were all from the same credit union,  The first mortgages were from all different banks.

Forgive me for my newbie question I'm really interested in wholesaling, what's the advantage to a seller to transfer their mortgage outside of a pending foreclosure?

Hard money or Private lending is an awesome way to get started. People new to investing in Real Estate may get scared by the interest rates but when you really understand how great of a tool Hard Money can be, its an awesome way to get your first few deals done. Experts also use Hard Money all the time. Its quick, easy and requires less criteria to qualify. As long as the rates are correctly calculated into your deal theres absolutely no reason not to.

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