Can You Still Buy Real Estate With No Money Down?

Published by julia | Filed under Buyer / Seller Tips, Real Estate, Shout Outs

The no money down real estate craze was really popular in the 1990’s, with scores of books on the market purporting to tell you how to strike it rich in property ownership without putting any money down to acquire your houses. It’s true that many people did actually become wealthy doing just this. But can you still buy real estate with no money down in this current market, and more importantly, can you still make money with it? The answer is yes!

Here are the top 3 ways you can buy real estate with no money down.

1.  Try Land First

Land is extremely easy to buy with no money down. In fact, the smaller the lot, the easier you should be able to acquire it for zero down. It’s extremely common for land owners to sell lots for no (or low) money down. Residential lots are typically easier to get for these types of deals, but in certain under-developed parts of the country, you may still be able to purchase commercial lots for zero bucks. However, the land deals you find may not look like no money down deals at first. Most sellers do ask for a nominal down payment, even if it’s only $100.

You can get around this and make it a no money down deal by borrowing the small downpayment on a credit card or as a personal loan. When you sell the land later for a profit, you can pay off the credit card quite easily, as the amount you’ll be putting on it will be quite small. Further, if you plan to keep the land and put a house on it one day, banks will be much more likely to give you a mortgage if you already own a piece of land outright (land can be very cheap and paid off relatively quickly).

2.  100% Financing

Though banks are tightening up their rules for mortgage lending, you can often still get 100% financing on a property if you have good credit. Alternately, you could find a bank that will loan you the 90% and then get the seller to finance the remaining 10% as a second mortgage. Either way, you put up no up-front money of your own.  In this economy, many lenders are willing to make such deals. If you’re financing a high-profit deal, you could get 100% financing from a hard money lender. The lender will charge high fees and interest, but they’re usually used for short-term deals where you expect to sell the property quickly at a a large profit, making the hard money deal worth it.

3.  Negotiate With Motivated Sellers

In this market, there are no shortage of highly motivated sellers, and those sellers are frequently willing to negotiate with you. Many sellers have been known to take collateral as a down payment, such as a car or other valuable property. They may also let you take out two mortgage notes with them….one for 80% of the purchase price and one for 20%.  The seller can then sell one of the notes to get immediate cash, and you get into the house with no money down. With the real estate market the way it is, it shouldn’t be too hard to find the no money down deal you want!