Can you really buy real estate with no money down or other people's money?

Figuring out if a bank will finance me to buy a second home for investment purposes. I know of a rental for sale. I don't have a lot of liquid assets and not a lot of equity in my current home.

Yes you can. I guess you've read Rich Dad Poor Dad. Great but he doesn't tell you HOW. It is something I have been trying to figure out for years. I got the answer a few months ago by my brother showing me. It is amazingly simple. All It takes is confidence and thinking big and clarity of mind. The more you try to figure it the more pieces fall into place.

So I guess you want to know how? Ok I will tell you - I'll email my bank account number to you and when you make your first million which you can do within a year - you deposit me 20%, ok?
lol - only joking - happy to help out. Ask youreself what you will do with al the $$ though. If you don't have a goal for the $$ it will end up destroying you when you have lots. Just a bit of philosophy - take it to heart because you will have plenty $$.

Take this 'formula' or principle and apply it to whatever is available, it is flexible. Apply your mind.
Ok here goes:

Remember confidence and think big.

Find a large property in a good area of your city/town that is for sale. The suburbs is a good place to start, find out from real estate agents which is the fastest growing area. Go to the dge of that where serious development hasn't started yet. A few miles is fine, the expansion will catch you. Once you have found a suitable site, look around and don't be disheartened if the first few are not spot on. You will be gaining experience with each site you look at. The site should be large enough to subdivide into smaller erven (erfs) (plots). There will be minimum size zoning allowed in specific areas.

I am assuming here that you know a bit about the property development lingo (of your country). If not do a bit of research by visiting your local (authority) municipality.

Once you have found a suitable site that can be subdivided say into 10 plots. Heres the crux!
Let's say the seller wants 1mill (theoretical amounts - whatever is going in your area and currency counts) for the property go to him and tell him you will give them 1.5mill if they go into a joint venture with you. They will. Then what you do is get the plans for the property from your local authority. Divide the property up into plots, use a landscape architect if neccessary, or do it youreslf. Get this development approved by your local authority. Again you will gain experience as you go. Once the plans have been approved for rezoning to residential size plots. This may take some time (find out names at the local authority and hound them, it will move faster) Then what you do is put the plots onto the market at residential prices (per square meter). Exorbitantly more than the original large piece of ground. As this is an expanding area they will be sold loke quickly. You give the original seller his 1.5mill and pocket the difference. Usually a hell of a lot of money.

As simple as that. Hardly cost you a cent. You used someone elses money and walked away with the finances to do the next project youreself.

Where you might have to put in money is for the drawing up of the plans, advertising and if you do a cluster dvelopment you should put a wall around the site (expensive) to sell it a concept (helps sell quicker and for more). For these costs you go to your bank and borrow the money using the large property as collateral. Remember the original seller and you are ina joint venture so you can do this (set up a cc if neccessary).

That is the jist of it. It is actually so simple. This is a general plan, it can be applied to many situations. It is a pretty hectic concept to try to get across in so many words. If I have left anything out apply your mind and fill in the gaps.

Go for it, believe in yourself and the world is yours.
Good luck.

Yes, it is possible, but to be honest, it has alot to do with your credit score and previous payment history; which you haven't informed us of.

Feel free to drop me a line if you'd like more personal consultation.

Big factor would be your DTI. Do you have enough income to cover the debts.

Yes, but you have to buy a house at a price that is significantly undervalued so the lender has enough collateral to cover any loan.

If this were true, then how come there are so many people who would like to by a house but can't?

No money down loans are easy. You can even find 100 percent financing for investing properties. Here are just a few a couple of ways to accomplish this, the first with no money from your pocket and the second with other people's money:

1. Something called an "80/20" loan. Basically it's two loans that will cover 100 percent of the appraised value of the home. Either have seller pay all closing cost or have your agent kick you down some of his/her commission to cover closing cost (or do both). You'll need credit to pull this off.

2. Find someone who no longer can afford their mortgage and assume their mortgage (if assumable) or buy their property "subject to" existing loans. If there is equity in the property, have the owner carry a note (also known as seller financing) for the "negotiated" equity. You can even get more creative (especially he wants a higher interest rate than you're willing to give) by using a wrap around mortgage.

If an owner is willing to sell his rental, I bet he's a canidate for option number 2, won't you think? You just need to think outside the box and see what are people's problems and how you can solve them.

Take care and good luck

Yes, depends of your credit score, income and your time working. there are many programs to help new home owners without any money down

Absolutely,

The best way to go about it is to talk with the listing agent about preparing a purchase contract with the seller "Contingent upon loan approval". In the market we are experiencing right now, the seller will likely be open to the possibility of paying a portion of fundds towards your Non-recurring closing costs. For instance, if the seller is asking 200k for the house, you should put in the offer at 200k with 4% paid by seller towards your non recurring closing costs (nrcc's) this will allow you 8k to work with for all the fees that may come up such as loan origination, title, escrow, etc...

In essence the sellers realized sales price is 192k which is likely in the area of what they where going to ask for anyhow.

Now, a good loan officer will set you up on an 80/20 or a 1st mortgage at 80% and a second mortgage at 20% in order to avoid an excessive rate on the first and PMI (private mortgage insurance).

If you set it up right, you should be walking from the transaction with a check. You should be getting paid to buy the property. I have made as much as 43k for buying a property, all at close of escrow. This is beneficial in situations where the property may need cosmetic upgrades such as new appliances and paint. If there is structural damage to the property, such as a crack in the foundation, this will not work as the appraiser is going to have to note any structural defects to the property and no lender will lend up to 100% of the purchase price in that situation. (I do know a couple appraisers willing to turn a blind eye, but that's becuase I have sent them a ton of business).

I have found some times there is a way to get finacing with little to nothing down, sometimes if you talk to a broker, who deal in this stuff, and what they do is try to find you the best deal with the best interst at a bank or credit union and then set up appointments for you, they take there fee at the end of the deal, which unfortunately can be high. Good luck

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