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@Ryan B. How did you search this local bank out? What were the questions you asked? What did you bring to show your qualifications? Was this for investment rental or owner occ?
Here is a list to buy a property with no money down...
Be careful to take the time and see the risks involved in buying a property with no money down.
Essentially, you're taking ownership of a property for zero money, there must be a catch to it. And there is, it's the contingency with potential consequences if you're not repaying it on time or as much as required.
I've seen a few clients get properties with no money down, never looked back and they lost their pants.
Just establish a clear plan with a thorough risk analysis when going ahead with this. If done well, your business can skyrocket.
@Aaron Klein I agree with you, having a clear plan of action with THOROUGH RISK ANALYSIS is critical!
I was just able to purchase my first duplex with little to no money down. Its a fixed rate a 5.25% amortized over 30 years. It's a "loan assistance" program where the loan provider will bring a 5% down payment to the table on my behalf, with the stipulation that if I sell or refinance the loan within the first 7 years that I have to repay this 5% down payment to them. However, I don't see this as a big issue because it is near downtown Cincinnati and I don't plan on selling anytime soon. I am also going to be living in the property as a house hack to reduce my monthly expenses! I have the money to deploy for the 5% down payment in the bank, but I would prefer to hold onto my cash for the time being so I can have it available to start up my Wholesaling business as soon as possible.
The only check I wrote during the deal is the $1000 earnest deposit when we signed the purchase agreement (which I got back) and then a few hundred bucks for an inspection since this is my first deal and I want to verify the condition of the home. I've done my homework, set my criteria, and connected with an agent that kicks butt, so we were able to find a "unicorn" in my market (found a duplex under $200K in a market where you see generally high 2s and low 3s) which helps hedge my bet. We also negotiated that the seller professionally clean the house as well as paint all interior walls. Not a bad bonus!
This first deal has gotten me some hungry to continue learning and developing myself and my business and I look forward to continuing to post and connecting with the Bigger Pockets community!
@Chase Clemens can you share the loan program you are using? Is it a national program, or a local community bank?
I am feeling a bit like there is a chicken vs egg situation here, with regards to approaching community banks for structuring creative no money deals. Do you:
1. Find a deal and bring it to the local bank, then talk about financing creatively, or;
2. Do you approach local banks with a plan of what you want to accomplish and establish the relationship prior to bringing them a deal?
Logic tells me option 2 is more desirable, but what steps do folks take to show credibility to the bank as a relatively new investor? I have my first deal under my belt (a househacked SFH that I have since moved out of), but am not sure how much credibility this will build when speaking with banks on the topic of more creative financing.
Certainly, a very interesting list.
There is a workshop on Lease Options in Troy next week- It would give those that are interested a better understanding of some creative financing strategies for homes. MichiganRealEstateInvestors .com or call 248-three nine four-0150
I would find out what the is seller position do they really want a large tax or would they like a monthly income, or become even a lender. It is all about being a deal maker.
In a recent podcast, Gabriel Hamel mentioned that "you don't have a money problem, you have a networking problem."
#7 is the most important skill someone can learn is raising money.
There are some very interesting and creative ideas here. I have one question...What percentage of investment deals closed do you think are done with No Money Down? I would love to hear feedback from this group?
I hadn't realized that #2 was an option. Thank you!
Michael Krupp - It depends on how you define No Money Down (NMD). If you define (NMD)
as $0 being involved in the down pmt., I'd say it's a relatively low %, but, if like me, you define (NMD) as $0 of MY MONEY being involved in the down pmt., I'd say it's a much higher %.
I, and many others I know, have done many, many deals using none of OUR money for the down pmt.
I love Brandon's book of investing with low or no money down on this topic!
How does this one work? Say I want to buy this house with a mortgage on it. Seller transfers. Do I pay him the amount of the mortgage? That doesn't help me. How does seller get full value? And of what advantage is it to me if I'm still paying full price for the home? The mortgage and remainder? Seller wants full price so...? I don't get it.
5. Get the seller to transfer their mortgage to you. This is a common occurrence in foreclosures where the homeowner is eager to sell and is willing to work with the buyer. You can do the deal as an assignment of contract and efficiently close the sale.
Originally posted by @Nicole A. :
@Shadonna N. I brought my deal showing the numbers (my top purchase price that I wouldn't go above, taxes, rent income, cash flow, etc) to a guy I know that has cash on hand. I knew he was looking to get more return on his cash than whatever it was getting at that point in time. So when I showed him I knew what I was doing (by showing him the numbers), he was happy to work with me. Sometimes you just gotta look for someone you know that has some cash on hand.
Hi Shandonna, by chance can you show me how your number works with this deal? I'm very interested in this. I'm also a newbie in RE
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