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10 “No
Money Down” Ways to Buy Real Estate
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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