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Turn the Television on any Sunday morning and you’ll
find yourself in the middle of a “how to buy real
estate” infomercial. Can you really buy a
house with no down payment? Can you really make
thousands or millions of dollars buying real estate.
Of course the answer is “yes” and “no”.
The real question is, are you willing to pay anywhere
from $500 to $5000 for the information, classes and
hotline? Most important are you self disciplined
enough to follow the program.
Before you spend money on these expensive programs,
here are my top ten “no money down” ways to buy
real estate. If you’re self disciplined and
willing to hear the word “no” many times before
you get a “yes”, then maybe you can buy a house
without a down payment.
- First is to check out the many
new zero down programs now available from lenders.
Especially if you’re a fist time buyer.
Also FHA and VA have loans that may not be zero
down, but are very close.
- Borrow money for the down
payment – Borrow the money from family, friends
or a business partner at a high interest rate or a
percentage of the profit when the property is sold
- Raise the price and lower the
terms – Offer the seller more than he is asking
provided he is willing to accept the down payment
in the form of a note. If the seller is asking
$150,000 with $15,000 down and willing to carry
the balance of $135,000. Try offering
$155,000 in the form of a promissory not instead
of cash. The seller gets a little more money
for the additional risk.
- Borrow against a life
insurance policy – Many life insurance
policy’s let you borrow against the policy for
the purpose of investing in real estate or other
investments.
- Use other property as
collateral – Create a note on existing property
that you or a partner own and use it as the down
payment for the property you are buying.
- Home equity loan – Home
equity loans are generally easy to qualify for as
long as there is adequate equity in the property.
- Seller refinance – Have the
seller refinance the property, receiving the cash
he needs from the proceeds of the new loan, the
buyer gives the seller a note for the balance of
the seller’s equity.
- Find an investor – There are
many people who have money but no time.
Their current profession keeps them too busy.
Work out a deal where they put up the money and
you split the profits when you sell.
- Lease with option to purchase
– Lease a property with the right to buy it at
some future time. Provide for the rental payment
to be credited towards the down payment if you
decide to exercise your option.
- Give them something they need
– If the seller is planning to purchase
something in the future that you own or can buy,
use it as a trade. This can be anything such
as furniture, boat or motor home.
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