Flipping w/no money down. - Posted by Shelly

Posted by Russ Sims on May 13, 1999 at 12:14:59:

This was the text of my ad. Rent to own: 2100 sq. ft. home needs moderate fix up. Mostly roof and floors.Large fenced yard, harwood floors. U fix and save! 95K. 555*5555

The ad ran on Sunday and I was getting calls a week later. I think there is a very good market for affordable homes that people are willing to put sweat equity into. The danger here is in getting a T/B who can’t do the repairs. Can they do the repair without making a mess of it? My T/B works in construction, so he had good references. Still, it’s no guarantee. So with the roof we agreed that he’s to roof only the porch first. The seller and I will inspect this and determine if the work is of good quality. If not, the T/B looses his option! If so, the T/B can proceed with the rest of the project. This is a very cooperative arrangement with the seller. The seller had right of refusal over my choice of T/Bs. Sometimes that’s what it takes to make them feel secure. It worked!

Flipping w/no money down. - Posted by Shelly

Posted by Shelly on May 12, 1999 at 17:14:37:

Is it possible to buy a house to rehab w/ no money down? Or on a L/O? How does that work on a L/O?


Re: Flipping w/no money down. - Posted by Russ Sims

Posted by Russ Sims on May 12, 1999 at 21:20:56:

Hi Shelly,

I just L/Od a fixer house with none of my money down. Here’s how it worked. I agreed to pay a $1000 down payment only if and when I found a tenant/buyer with at least $2000 down. My purchase price is 87.5k. I resold to my t/b for 95k. My lease payment is $700/month, with $200 going towards purchase. My T/B is paying me $875 per month, with $100 going towards purchase. I collected $2000 down from him. $1000 goes to me, and $1000 goes to the seller. So I pocketed $1000 and insured myself a $175/month positive cash flow. I’ll collect the remainder of my profit when my T/B exercises their option. They are agreeing to replace the roof as part of their down payment. This deal was so easy to put together (a one day ad generated 30 calls!) that I think I’ll look for more fixers to L/O!!

A WAY TO FLIP WITH NO MONEY DOWN! - Posted by Karl Grube

Posted by Karl Grube on May 12, 1999 at 17:20:41:

Option the house at your price. Option consideration is the money you will put into the house. After rehab is completed, get a bank appraisal. SELL the OPTION to a private investor or EXERCISE the OPTION yourself.

Re: Flipping w/no money down. - Posted by Duane

Posted by Duane on May 13, 1999 at 22:06:16:

How do you find banks that agree to this, or do you use some other form of financing?

Re: Flipping w/no money down. - Posted by GregA (NE)

Posted by GregA (NE) on May 12, 1999 at 22:32:46:

Would you mind sharing how you worded your ad? Thanks in advance.