The Truth About No Money Down Real Estate Investing
Interestingly enough, I actually have new investors frequently come to me who are fortunate enough to have a large nest egg which they can use to get started in the business. Many people have approached me and said, I have $100,000 in the bank. How should I invest it.
I always advise them to put their money aside and learn how to do deals without money. Money can kill your creativity, and creativity is essential in this business in my opinion.
Even $100,000 doesn't go very far when buying homes, and if you always rely upon the cash that you have, you will often find yourself without any cash and unable to do more deals until you sell something.
So even if you have access to some of your own money, my advice is to first cultivate your ability to do deals without use of your own money.
Not only will this help keep you creative, but it allows the cash you do have to act as a safety net, making you even stronger. Never underestimate the value of a BBC (Big Bag of Cash).
Now lets go back to my earlier statement that no money down real estate investing should really be better phrased as none of YOUR money. Their bears further explanation.
Here's a quick list of a few ways to invest in real estate with none of your own money: I'm referring to such things as a hard money lender or private lender to purchase and rehab a property.
Make sure you're getting a good enough deal so that your lender can safely loan you enough money to cover your purchase price, closing costs, holding costs and rehab costs. I do it all the time. Then you can either refinance or just sell. None of your money was ever used.
Many individual sellers will be open to this scenario especially if you're offering it on the short term and they can make a little more money because of it. (I will often pay a little more for a house if owner financing is involved because of what I save in closing costs.)
Many people will get into arguments with on this one about the due on sale clause. I won't go into that here, that's another article (or an entire course) entirely. But suffice it to say that it's another variation of owner financing, and can be a powerful way to get into a deal with no money down.
Keep in mind that even though it may not be coming out of your own pocket, you must have a source for the working capital needed to hold and possibly renovate a property.
This source can be your own bank account if it must, but if you want your deal to truly be no money down real estate investing,consider finding someone else (a friend or colleague) who is willing to make an investment in you and fund these holding costs. This can be much easier than you may think, trust me.
Whichever you choose, you should be sure of your source for working capital before you buy an investment property.
Can you invest in real estate with no money down and keep your ethics intact? The answer to this question is a 100%, absolute, unequivocal yes!
Many people find this difficult to believe because they feel that we are taking advantage of someone when we buy homes really cheap.
In fact I struggled with this issue myself when I first started, especially when it came to offering less than what a seller was asking. If they were asking $80,000, then offering $60,000 made me feel uneasy.
But after getting a few of these offers accepted I realized that I wasn't such the bad guy after all. The sellers were just happy to have someone willing to buy the home, and I was solving their problem in a big way.
Another example involves a woman who sold me two homes which had appraised for $100,000 (combined) for $29,000. She was crying when she sold them to me because not because she was so upset, but because she was so happy that I had taken these house problems off of her hands.
I realized at that moment exactly what a motivated seller was, and what kind of valuable role I had to provide them. I was truly providing a desperately needed service.
As a result of my experience, I have but one comment to make with regard to the sentiment that we are somehow stealing houses. If the seller could get more money or a better deal from someone else, then they would take it Get over it!
The reason the seller is willing to sell you their home really cheap is because no one else is willing to buy it or give them more for it.
Most of the properties that I buy really cheap are from banks or government agencies. Do you think they don't know what they're doing? Wouldn't they get more for their homes if they could? Would you feel bad if a bank sold you their home for 50% of fair market value?
If so, relax! It's all part of the business of finance and real estate. You are going to get paid for knowing how to buy and flip houses.
You will be helping not only the sellers by buying their problem properties (something which few are qualified or willing to do), but you will help other investors by providing them with a profitable opportunity, the local community by doing something productive with an otherwise vacant home, and eventually a family by providing them with a nice place to live.
So all things considered, I would submit that not only is no money down real estate investing possible and ethical, but when properly practiced, it provides the community at large with a number of benefits and a much needed service.
Related Tags: foreclosures, short sales, preforeclosures, make money in real estate, no money down real estate
Richard Reichmann is internationally known as a millionaire maker. He's a leading consultant in real estate and internet marketing strategies that are profit proven.Subscribe to our FREE newsletter Value $147.00http://www.InstantRealEstateWealth.com
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- The Beginning of the Cataloging Code
The first significant cataloging code was published in 1841. The realization that cooperation and s - In the Lap of the Gods 24
Life moved on. Lily became well liked by both students and staff because of her cheerful outlook on - In the Lap of the Gods 23
Does fate decide the future? Is it all mapped out for us, predestined, or can we influence what com - Write Your Memoir: How to Write About What Troubles You the Most
Everyone has a story to tell, and unfortunately those stories aren't always pleasant. What makes me - How Crafty Word Order Can Instantly Improve Your Writing
by Philip Yaffe I am usually very reticent about offering writing tips. Unless they are linked to - You Say Grandpa, I Say Deda
I was born with two grandmothers but only one grandfather. In nature's rules of familial supply and - My Russian American Dichotomy
I was a Russian girl and an American teenager. I had no choice about the first but I tried very har - In the Lap of the Gods 22
This is just an explanation for those who have read some of the other Chapters of, "In the Lap of t - Write a Book: 8 Reasons You Should Do it
Studies have shown that 82% of people want to write a book, but few of these actually ever achieve - Book Review: the Book of Common Prayer
Book Review: The Book of Common Prayer, "My carry-with-me copy is this size, and I recommend it for
Most viewed articles in this category:
- Real Estate Investment - Investing In Commercial Properties
As in any other type of investment, its obviously advisable to do your research well so that the pro - Taking Care Of Acne Prone Skin With Proper Skin Care Products
Although acne has been largely associated with teeners and puberty, the condition is not only confin - Do I Really Need Eight Hours Of Sleep Each Night?
What if you were told that there is no definitive answer for why we need to sleep? Your initial reac - How to Improve Your FICO Credit Score
If you didn't know this already, having a good credit score is more important than having a lot of c - 10 Tips for a Magnificent Memory
"Where did I leave my keys?" "What did I come in here for?" "Your glasses are on top of your head!" - Things You Might Like To Know About Card Companies
If you have a regular income and are 18 or over then you may be able to get a credit card. You will - Bad Breath in Babies and Toddlers
If your baby or toddler has had bad breath lately, not to worry. There are plenty of things you can - Starving College Students No More
The majority of today's college students are extremely Internet savvy. In fact, many of those studen - Cosmetic Surgery Financing: How Can You Get It?
Cosmetic surgery, a branch of plastic surgery, can be quite expensive, especially if you are plannin - Article Marketing, Improve Your Ranking With Links
Article Marketing, without a doubt remains the best free formula for attracting website traffic. At