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Be Creative in Real Estate Investing
"Buy With No Money Down"

Many people have the misconception that real estate investing need a huge amount of initial payment. This is true to some extend. However, there are many ways for you to be creative in real estate investing which can start you off with no money down when you purchase a property. You just have to know how it works and think creatively.

Buying properties with no money down indeed may sound too good to be true. But it has been proven that it can be done, and with profitable success. This is not easy, but with careful thinking and financing plans, you too will be able to reap success. With testimonies of many others who have utilized only their good credit and provable income, they have secured real estate investments that are stable and high yielding too, with no money down. This is what I call ¡°Creative Real Estate Investing¡±!

Start it Small, and Grow it Big

One of the easiest types of creative real estate investing is to buy with nothing down on 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". 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. 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? You can borrow from the down payment. In the above example, you eventually make $21,000 when you borrow the down payment on a credit card at 18% interest, this perhaps will take a year to do the deal. You would make $210 less ($30 cash advance fee and $180 interest), or just $20,790 profit, which is good.

Buying land is also a way to get a property with no money down. When you invest in 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 method, you might get 100% financing from a "hard money" lender. These lenders charge very 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 higher 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 the 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 ¨C and that¡¯s all in all in creative real estate investing.

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