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How Does One Buy Real Estate Without Any Money?
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I’ve heard many gurus talk about buying real estate with no money out of pocket. Is this really possible? I want to hear of a strategy that really works not something theoretical.
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The above is a user contributed question for the Real Estate License Direct community. To answer this question and become a part of the community simply fill out the comment form below, or register here. You might also ask your own question by filling out the question form on our real estate questions page.
October 29th, 2009 at 1:37 am
The gurus have at least enough $$ to make the deposit and handle the settlement closing costs.
What they do is apply for the maximum loan based on the value of the property in addition to taking into consideration what they expect rental of the property will cover the monthly mortgage loan pymts, taxes and insurance which the finance books refer to as utilizing LEVERAGE (someone’s else money <= the banks) while tenants are covering the monthly payments etc.
There are risks like if the property is vacant as well as maintaining good receipts of the cash flow bec one has to pay taxes…though an invesor will often depreciate what is allowable to bring down their taxable income more.
In real life, it’s not as easy as they claim and real estate is also not liquid meaning if the market changed & got worse, to sell real estate takes time and requires the Seller to pay selling costs etc
October 29th, 2009 at 5:40 am
You should read some books on this, Go to a book store like Barnes N Noble and see what you can find in the real estate section. There are ways of doing this but it is some what of a gamble on your own finances, That does not mean that it can’t be done though.
October 29th, 2009 at 7:04 am
You have to sell your flying pigs before hell freezes over.
October 29th, 2009 at 7:49 am
you go and borrow the money.
October 29th, 2009 at 9:13 am
U can Get a loan!!!
October 29th, 2009 at 2:08 pm
u need money to buy anything these days but if u dont have it in your pocket then pull some out of the bank or write a check or use credit but make sure u dont over do it u need that money to live on
October 29th, 2009 at 4:57 pm
Don’t fall for any of that infomercial stuff – YOU NEED MONEY TO BUY THINGS
October 29th, 2009 at 5:52 pm
Start out with good credit and being able to qualify for 100% financing. Identify the property. It the seller is sufficiently desperate then they will agree to pay all your closing costs. You may have to still come out of pocket with money for the inspection or the appraisal, and some kind of earnest money deposit, but all this you can recover at closing if the seller agrees. Net out of pocket will then be $0. I’ve heard of (never seen), buyers actually leaving the closing table with money.
October 29th, 2009 at 6:28 pm
lol
October 29th, 2009 at 11:19 pm
Some lenders will lend you up to 80% of the After Repair Value of a property. It works like a construction loan – mainly local banks make these loans. I just closed on a HUD property. ARV was $159,000 based on an appraisal the bank had done. Purchase price was $117,000. My loan was for $127,200. This amount covered all my closing costs and I got a check at closing for $7,234 for repairs.
October 30th, 2009 at 12:50 am
If what those “gurus” are trying to sell you was true, why are they trying to make money from that instead of real estate?
However, if you buy those books quickly, they will throw in a set of Gensu knifes.
October 30th, 2009 at 2:03 am
One of two ways. First and foremost, you need a good credit score. In some areas, like California, you can get 110% financing. That will cover the home, taxes and closing costs. The other way is to buy a home for less then it’s worth. If you buy a house for 80% of what it’s worth, you can finance the whole thing because you are instantly aquiring 20% of its equity.
October 30th, 2009 at 6:41 am
You can buy a home with an 80/20 mortgage, but you’ll probably still need to have some “hand money”. The 80/20 mortgage is actuall a mortgage for 80% of the cost of the house and then you take out a loan for the other 20%. You don’t pay PMI, but you have to be careful not to get burned on the terms of the loan.
October 30th, 2009 at 10:18 am
Sure you need money but not necessarily yours,you borrow from a bank or other sources,but don’t come looking to borrow from me.
November 19th, 2009 at 4:01 am
A lot of people seem to think buying a home or rental property with no money down is such a blessing. How about buying a move in condition home that is a 3 bedroom for less than 9,000 cash? Yes that is what my husband and I did this year 2009. Won a “move in condition” home for less than 9,000 cash from the owner in an auction, and not a repo or short sale or hud home. Now the home was not perfect we had to fix toilet and sink leaking and change out the bath tub fixtures, a few what we call not major repairs and cost us less than 150 to repair. We moved in shortly after paying and all the paper work completed. My husband and I also purchased another home that needs work in the same city, and we are slowly working on this one to be able to rent out in the future, this home we bought for less than one thousand cash another winner of an auction, and the house has 4 bedrooms and a 2 story with a very big lot of land in a residential area, and not a burnt house or anything like that. We may move into the 4 bedroom house when complete, and then end up renting out the house we live in now. In our will we are leaving our homes to our children after we are dead. Forget about trying to buy a house with no money, you still have to pay on that house every month. Instead save your money and buy a house for cash, it is yours and any money you put into it is an investment in yourself and your children/family. Be patient and wait for your blessing from God, it will come.
December 13th, 2009 at 10:56 am
Godly Lady, how does a person find out about when/where an auction of this type is taking place? OR, Where did you find out about these auctions. Your answer certainly does sound like the best one.