No Money Down Real Estate Investment
The simplest no money down real estate investment is to take over the payments, also called “loan assumption.” You’ll need to be approved by the original lender, so you’ll need good credit.
If you cannot get approved for an assumption, or do not want to borrow, consider investing “subject to.” You’ll make the monthly payments but the loan remains in the seller’s name. Be sure to have an air-tight agreement that cannot be construed as predatory or misleading.
What if there is no mortgage?
Lenders want to make a good investment. Even in today’s economy when many lenders will shy away, there are still plenty (including private ones) who will be glad to finance you, as long as they know they will get their money back in the value of the property.
What if the seller wants more than what is owed on the mortgage?
There may still be a way to structure the deal…
- Arrange to take over the remaining payments – either by assumption or by subject-to; and
- Determine the equity and arrange to pay the seller in equal, regular installments over a period of time, say between 5 and 10 years. DO NOT PAY INTEREST ON THE EQUITY. You are not borrowing; you are taking over full responsibility for the house and loan(s). Motivated sellers understand this.
If you do use this two-part approach, both parts must work in your favor. You are in the real estate investing business to make money and must learn to walk away from any unfavorable deal.
For a free eBook on No Money Down Real Estate Investing, use this link.
