Have you ever wondered why some population seem to get all the good real estate deals? Does it seem unfair that creating wealth appears to be for the rich only? Well I have some great news for you. 'No money down' deals on real estate can be done by everyone, when you learn the skills.
Buying a asset with no money down is a mindset. The deals are not advertised as 'no money down' deals, they need to be constructed to be this way. And yes, whatever can do it, it just takes some education and a petite confidence.
All real estate deals need to be seen as an opening and they may need to be worked a little. You may need to spend some time, face some challenges and grow and fabricate in your financial education to be able to make these opportunities in to reality. I will give you a few pointers as to how to work a real estate opening into a 'no money down' deal.
Firstly, don't all the time believe what the real estate agents say, they will often tell you what can't be done rather than what can. Let's face it, most of them are not seasoned asset investors.
One uncomplicated way to get this dreamy 'no money down deal' is to find a asset that is worth investing in. Get a concentrate of valuations done on this asset by separate valuers. (A trick here is to get a few valuations done, they will all come back differently and then you can select the highest one.) Make sure you do this Before you buy the property. If the valuation comes in higher than the purchase price, then you can get finance based on the valuation, rather than the purchase price. Now a good rule of thumb when investing and construction a asset portfolio, is to get your properties financed with the highest Lvr (loan to value ratio). Aim for 95% if possible. This will help you buy more properties and get your briefcase off to a flying start.
Some quick numbers to help you understand this concept: Say the real estate agent was asking 0,000 for the property. You got a concentrate of valuations that came back at 0,000, 0,000 and 0,000. (This is undoubtedly possible). Assume that you can get a loan for 95% of the valuation price i.e. 0,000. Therefore, you are paying 0,000 for the asset but are able to get a 0,000 loan. You could even use some of this extra to fund your next deposit. Easy!
In Australia, and you'll need to check the rules in other countries, but the big 4 banks use their own valuers, so you may not have the luxury of selecting a valuation. They often value it lower too, to 'cover their buts'. You will have to use a second tier lender, but that often isn't a bad thing, in fact I use them more normally than the main banks.
You could also make a contract subject to a valuation arrival back at a determined price. If it doesn't come back at that price, then you have the choice of bailing out, but if you like the property, then you could ask the seller to drop their price so that you still purchase for 'no money down' e.g. purchase price is 0,000 and you want a valuation of 0,000. If it only comes back at 8,000 then you can ask them to drop the price to say 0,000.
When purchasing a property, the finance is an extremely leading part of the comprehensive transaction. It is leading to understand the theory and work within it. There are often separate ways of structuring things so it is advisable to get a broker (specifically an speculation specialist e.g. Investor Finance), that can help you get creative with your finance deals.
You could also ask for seller finance. If they can't finance the whole asset i.e. They may need the money for something else, then at least ask if they can leave in the balance of what you can't get from the bank. For example, if you want to purchase a asset for 0,000 but the bank will only lend you 0,000, then ask if the seller will take a second mortgage over the property, and leave 0,000 there for you. This would generate a 'no money down deal' for you.
A great tip for investing in real estate in normal is to not fall in love with the property, but fall in love with the deal. Look also for Motivated Sellers e.g. Divorced, bankrupt, lost job etc. For some places you can put in a crazy offer and then just keep your eye on it. If the asset is still on the store in 3 months, then call them again and re-offer the crazy offer. It won't seem so crazy to them now. You can then keep the property, rent it out or resell it or do a 'rent to buy' (see http://www.toolsforwealth.com for a goods impart of this great strategy).
So in conclusion, you need to be Creative for 'no money down deals' on real estate, but they are there. You just need to be able to see the opening and do things a petite differently.
How To Buy A asset With No Money Down