Hi there. I'm just wanting to know if this is something that other investors might pursue. I have been using the BRRRR method this year with good success so far. Once refinanced, I have at least 20% equity in my 3 properties I have acquired this year. I have the opportunity to pick up two duplexes, side by side, with zero dollars out of pocket. The bank I use for my commercial loans will finance these at 80% of the purchase price and the owner will finance the 20% downpayment. After running numbers, I have figured that I will still cash flow approximately $350 per duplex, after debt pay down, 10% capex, 10% PM (even though I do this myself), taxes and insurance. I also believe I will be able to raise the combined rents from $2500 to $3000 within the next quarter. The numbers aren't great, but I would get into them for no money down, which would enable me to use my available cash to find more deals. I would love to see if others would pursue something like this or if having no equity would be considered too risky. I'm in the Omaha, NE area too, which is pretty stable. Thanks for your time!

People in this thread have been asking how this kind of deal is found. They are normally found in the following way... 1) Find a seller that has not listed the property. 2) Offer 110% of what they want to ask for the property if they hold 20% as a second. 3) Find a bank that will go for the owner holding the second. So it works like this... say the owner is considering listing the property at $100,000. If the property is listed the seller hopes to get $94,000 at best at closing. If they go with the plan mentioned above they get $88,000 at closing a 2nd mortgage for $22,000. They can instantly flip that 2nd in the secondary market for more than $6,000. Appraisal is the normal hang up. But if it will cash flow that will not be a problem. I should have called myself a guru and charged $35,000 for that explanation.

I guess I am the only one who would not do this. I feel if someone can't afford a reasonable down they shouldn't buy. I am extra cautious and have always been. I don't ever want to own anything I can't sell tomorrow and keep cash in my pocket. In 2007 and 2008 many friends laughed at me as they borrowed and bought. They all lost everything and I never worried one bit. To each his own. Good luck!

I have had great luck with Benson over the past 6 years. I have never had to evict a tenant that I screened (knock on wood). I stay west of 50th and South of Ames.

@Jonathan Johnson @Daniel Cuevas Neither the buyer nor the seller front any cash - only the bank does. Here's how it would work if the purchase price is $100k: - Bank writes a check for $80k to sellers - Buyer has a loan of $80k owed to the bank (with monthly pymts due) - Buyer has a loan of $20k owed to the sellers (with monthly pymts due) Sellers benefit bc they get $80k in cash & future cashflow (until the $20k loan owed to them is paid off)

I pray for deals like this. CF is king.

Would you acquire properties with full leverage, and zero down??

Sterling Anderson

Investor · Omaha, NE · Member since 2015 · 115 posts · 13 votes

9y

It's a great strategy and definitely one I'm looking to do more of as we pursue rentals in both Omaha & Kansas City. Keep us updated on your success Kyle Godbout

Would you acquire properties with full leverage, and zero down??

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