Creative Real Estate
Investing; The Magic Words in
Property Investment at all times:
"Buy With No Money Down"
Creative real estate investing? No money down real estate investing
should be just that -- you put down nothing at the start. That is one of
a creative real estate investing method.
But a lot of people get tricked
into thinking they have to deposit at least something whenever they buy
real estate, even using a simple option purchase agreement.
That is a massive misconception.
Huge! So in the next couple of minutes let me show you how ordinary
people like you are confidently doing safe in creative real estate
investing, no money down real estate
investing even in today's economic environment. Some of them are
successfully dong this on their own, although this is not easy. Many
others are utilizing only their good credit and provable income yet
getting real estate investments that are secure, high yielding and yet
are practically turn-key.
No Money Down - Starting With
Land
One of the easiest types of
creative real
estate investing is to buy with nothing down is land or small lots. In many areas of
the country it is common for sellers to sell these properties with a
small down payment or none at all. Of course, one of the reasons they do
this is because it is an easy way to get more for the land. I once
bought a piece of land for cash and resold it in weeks for 30% more,
because a lot of buyers could afford my terms: $250 down and $100 per
month. So be sure that you are not paying too much.
"Too much" doesn't necessarily mean
paying a lot over "market value" however. It is determined by what you
will do with the property. For example, if you have no other way to buy
a small lot, and as a result of the easy terms offered by the seller you
pay $12,000 for a lot worth just $9,000, is that too much? Not if you
will later put a modular on it and make a $21,000 profit selling the
package.
Now you might notice that many of
the lots and parcels of land for sale are not offered with no down
payment; another creative real estate investing opportunities to be
noticed. Most sellers will at least want something at closing, even if
it is only $1,000 down on an $8,000 lot. So how do these become "nothing
down" deals? By borrowing for the down payment. In the above example,
where you eventually make $21,000, what if you borrowed the down payment
on a credit card at 18% interest, and it took a year to do the deal?
Then you would make $210 less ($30 cash advance fee and $180 interest),
or just $20,790 profit.
Land is also a way to get into a
home with no money down and a creative real estate investing option. When you buy real estate this way, you can pay
for the lot over a few years, and then use it as the equity necessary to
get a home loan. many banks will loan you the money for a modular or
stick-built home if you already own the land free and clear.
100% Financing
If you have a good credit score,
you might still be able to get a 100% mortgage loan. They are getting
less common now (late 2007), but I still see an occasional advertisement
for them. Alternately, you might find a lender who will loan 90% and
still let the seller finance the other 10% on a second mortgage, meaning
none of your cash is necessary.
If you are looking for a creative
real estate investing, you might get 100% financing from a "hard money" lender. These
lenders charge high fees and high interest, but the idea is that you use
them for high -profit deals that make it worth it. Other investors may
put up the money for the down payment and repair costs on a fixer upper
project, if you find the right deals. This can be at a high interest
rate, or for a share of the profits.
Buy Real Estate From Motivated
Sellers
If you stick to properties that
have highly motivated sellers, there is usually a way to buy with no
money down. For example, a seller might sell his $90,000 house to you
with only $3,000 down if you offer him $95,000 and a good interest rate.
You can borrow the $3,000 of course (or even a little more to cover
closing costs, if you want nothing at all into the deal).
Sellers have been known to take
cars or other pieces of property as a down payment. They may let you buy
with two mortgage notes, one for 20% and the other for 80%, one of which
they'll immediately sell to get the cash they want. To buy real estate
with no money down, just look for a way to get the seller (and the
lender, if necessary) what he needs - without using your cash - creative
real estate investing.
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