No Money Down Real Estate: The Untold Dangers Every Investor Should Know


The no money downย (NMD) mode of real property acquisition has been a darling topic for discussion on BP lately; we’ve had books, articles, and some of us were even on CardoneZone with Grant Cardoneย discussing the subject.

Brandon Turner came on first… he is too nice! I mean, he represented BP perfectly, but he is just so nice…

Me, not so much. Can you say… on fire, baby! BAM!

Related: The Book Investing in Real Estate with No (and Low) Money Down

The thing I didn’t get a chance to get into with Cardone, and the thing that doesn’t get as much daylight as it should is the subject of land contracts. When we think of NMD, the first vehicle that comes to mind is usually land contracts. However, it is important to note that land contracts are indeed dangerous in several ways!

I am a huge proponent of “getting your foot in the door” via creative finance. But I must say this: When pursuing an installment sale vehicle, there are many, many caveats…

What do you think? If you’ve successfully executed a no money down deal, what advice would you give to give to a novice investor?

Leave a comment, and let’s discuss!

About Author

Ben Leybovich

Ben Leybovich has been investing in multifamily residential real estate since 2006. His area of expertise is creative finance. Ben works extensively with private as well as institutional financing. Ben is a licensed Realtor with YOCUM Realty in Lima, Ohio. He is also the author of Cash Flow Freedom University and creator of a cash flow analysis software CFFU Cash Flow Analyzer.


  1. Jerry Kisasonak

    I think this video was well done. It is true that you don’t see much owner financing in desirable areas, which is the same things as saying that owner financing appeals much more to owners who have exhausted all other options or who simply have no other options. Having said that, I wouldn’t let that keep me from asking.

  2. Jordan Finkelman

    Ben – awesome video. If a property has been sitting on the market for a long time (say a year) due to overpricing the asset by say 15%, wouldn’t it be worth purchasing if you could meet the owner’s price by financing a NMD over 10 years interest free?

    I suppose the lack of quality in this scenario is not necessarily in the asset, just in the owner’s delusional idea about what the price should be. They may ignore the market pricing altogether with emotions and attachment to the price paid when taking a loss. I think this happens quite often due to property owners who purchased back in the mid 2000’s.

    • Ben Leybovich

      Hah – you’re pretty sharp, Jordan. Yes, this value add is where owner-financing starts looking interesting. The caveat is that if you over-pay for garbage then even if it’s with very favorable terms you still have nothing. Over-paying for quality and compensating for that over-paying with value add in financing package is another story.

      Good thinking ๐Ÿ™‚

  3. John Matthews

    So Ben, let me ask you this – if you had to start all over without any connections, track record, money or equity in assets, and no friends or family to lend you any money, what vehicle (or vehicles) would you use to purchase properties NMD if not through seller financing when and where you can get it (on still cashflowing properties)?

    • Ben Leybovich

      John – I’ve never used family and friends to generate purchase money. In fact, while it’s sexy to talk about, I think that family and friends is a bad way to go – I was never comfortable with it.

      The most crucial step in the beginning is developing a circle of influence that transcends family and friends. That, naturally, requires faking til you make it, which is a function of compensating with knowledge for what you’re missing in track record…

      I don’t know that I’d be doing anything different. There’s no magic to this…

  4. By Brandon’s assessment of what his book is intended for and your assessment of Brandon, I am certain that the book should be on the novice must read list. This was the second video I have watched with you on it, the first was with Brandon and Josh. You played well with others on that one. I watched Grant’s podcast and he is magnificent like you said, what I did see was the similar points and I think it is your style to run with an edge so I assume with all the dangers involved in doing that, that you respect him.
    I always look forward to reading or now watching everything that I see your name on because you are relentless in your pursuit of the most interesting points, I once again assume that is to inspire thought and a little controversy. Thanks so much for being interesting.
    Oh yeah don’t you think they are a little overpriced because of the simple fact that they bought too high in the boom town mentality before the crash and survived til now?

  5. Ben Leybovich

    Gary – if you’re talking about 10X, I can tell you that I’ve bought a copy on CDs for myself, and one of my business partners. I don’t have much time to sit down with a book, so CD format works well for me. I’ve heard this to be the case for a lot of RE guys, and this is why I made CFFU available in print and MP3 – it works well for people.

    10x is good – a lot of slant toward sales and not RE, but as you know – you don’t sell, you don’t eat. So – good enough for me ๐Ÿ™‚

    Thanks for the nice words about the stuff I put out. Not everyone will agree all of the time with Ben Leybovich. Too bad – Ben Leybovich is always right…:)

    Just ask Brandon Turner!

  6. David T.

    Great post, but probably too real for the majority on BP. NMD deals are at the bottom end of the property market, always have been and always will be and the guys who sell this stuff are usually predators. Steering newbies to this form of investment is not good at all.

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