Financing-no money down

11 Replies

Has anyone purchased a property without any of their own personal money down via a loan with a partner, hard money lender, bank? What are some of the better options thru your experiences? Thanks appreciate all the feedback. Rookie from North Jersey

I have done it several times. I think the best chance an investor has at purchasing something without using their own money is to show a track record of success.

If you have not done any deals up until this point I recommend making some purchases using your money so you can show potential investors that you know what your doing.

Everyone needs to bring something to the table whether it be money, knowledge, experience, existing systems etc.

@Jason Deutsch

 were you successful purchasing without any money down?  I'm new to investing and looking for no-money-down strategies to get started. 

@Krista Campbell I have not yet purchased my first property. I am in the process of looking at properties & still trying to educate myself as much as I can. Still looking to use creative financing. Either it be seller financing or private money. My best advice is to keep educating yourself & asking questions. Best of luck!!

@Krista Campbell

I know that that this thread is a few months old, but just wanted to chime in. 

I can speak from experience that it is possible. For me, I've done them with 20+ multifamily and SFR. The key is structuring the deal or "transaction engineering" and marketing yourself.

It all starts now and you want to just get out there and just start closing transactions to build a track record. You learn the most through transactions and you start thinking creatively. 

Your primary goal if you decide to do little to no money down is to establish credibility first and find motivated sellers. 

@James Wise is right, start doing a few small deals. If you are starting with little money work on your credit score and get a line of credit through an LLC.

Work with local credit unions and hard money lenders. With banks, they will want to see tax returns and credit reports, so this is where your networking will come in and partner with a credit partner and show 19% ownership for you (they won't check W2 and tax returns on partners below 20% ownership) and show 81% ownership to your credit partner who will use his credit to get the loan. This is just the ownership, which means you still negotiate the cash flow and equity on sale (50/50, 70/30, 20/80). All of it is negotiable. But focus on getting better and better at servicing your customers, this is your banks, sellers, and partners.  

Find hard money lenders who will do 65% of ARV with little to no money down. Find deals that are 65% ARV including repairs.. meaning 65% of ARV - repairs = your strike price. You are creating value for your hard money lender.

The key is to get your name out there and let people know what you're doing. Your network will eventually build up and you will have the right pieces to get deals done. There's definitely people out there who want to give you money if you do what you say, say what you do and can demonstrate you know what you're doing. 

Those are just a few of the many ways. 

what are the credit score requirement for a hard money lender ?  

  1. If you currently own a home, consider a home equity line of credit & using those funds for the down payment on an investment property.

@Chris Ntwali

Hi Chris,

Institutional HML's will all want to see your credit, even if they don't require a very high credit score. Most will want at least a 500 score to have confidence in you, with the better rate/point terms coming with scores over 600.

Interestingly, experience and the deal itself have a much stronger bearing on HM financing than your credit score.

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@Swat Khan That post ROCKS!  I love your thinking, and you gave me some great ideas right there.  I'm working on an 8 unit right now, and I just might be able to use your strategies here to  put it together.  Thank you!

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