Reality of zero down - Posted by Scott

Posted by R C on February 17, 2002 at 21:03:20:

Scott - the reality is that, “technically”, most of the deals are NOT zero down - the trick is in the creative financing and deal structuring that makes it none of your own money down. I have purchased many properties with no money out of my pocket and even gotten cash back at closing. I am in the process of buying an apartment complex right now in which there is a 20% down payment which the seller is funding via a 2nd mortgage. There are countless ways of doing these deals - keep reading the posts here and study all the materials you can for it is true that, indeed, knowledge is power. Good luck and happy hunting.

Reality of zero down - Posted by Scott

Posted by Scott on February 17, 2002 at 20:31:01:

This past weekend I attended a financial seminar where Robert T. Kiyosaki as well as other real estate gurus were guest speakers. One guy stated that zero downs are extremely rare, and in the event that you do get one, you will (most of the time) be paying full price for the property. Can someone fill me in on the reality of zero down?

Also, I am a new investor and just graduated from graduate school. Not having much $$ what type of property would be a good starter investment? rental houses, duplexes…etc.

Thank you for your time and help.


Re: Reality of zero down - Posted by Steve McConnell

Posted by Steve McConnell on February 18, 2002 at 15:16:14:

I do agree to a certain point with what Ronald Starr had to say but I am living proof that even before I heard of Carleton sheets I was able to purchase a home with absolutely no money out of my pocket as a matter of fact not only did i get the $100 back at close I put $650 dollars in my pocket. And to top it off I had no idea what I was doing. I was fortunate to meet the right Real Estate agent and she knew a bank manager and between them they were the ones that made this work. So the short answer is yes the zero down deals are rare but with the right kind of financial help any deal can be a zero down deal.

answer - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on February 18, 2002 at 01:10:47:


The speaker was probably right–it will be rare to get a zero-down deal with a bargain price. But, it might be done. And, depending upon where you are, paying market value may be good. The question is, how much rent will you get for a property and what will be your expenses? If you would tell us your state, it would be easier to tell you what might work where you are.

For instance, I just got back from OK. In and near Oklahoma City, you can find two and three bedroom houses for maybe $35K that you can rent out for $400 to as much as $500 a month. You might find that your monthly payments might be: mortgage payment is about $250, taxes about $30, property insurance about $30. Thus, you might be paying about $310/month out and taking in about $400-450-500. Now, there will be repair costs and vacancy, so the actual spendable cash may be less. However, offseting this is, if you have income taxes to pay, that you will get some tax benefits.

Also, you might find a property that needs fix-up and, even though you pay the full market value for the rundown property, you make a profit by fixing up and then selling for a higher price. This program fits especially well with having the seller finance the purchase for say 1 year.

Also, there is the possibility of buying a bargain property and not paying out your own money. If you could find a rundown property you might well be able to borrow from a private individual up to 60 or 65% of the fixed-up value. If the purchase price is less than this amount, you would be in with no money of your own. Then fix up and either refinance or resell.

Just realize that only a very low percent of properties can be bought with no money. It might be 1% or 3% or 5% of the properties in your area, depending upon your location. Also, almost none of them will be properties listed in the local real estate multiple listing service. You will have to go and beat the bushes to find the ones that can be bought that way.

Good Investing*************Ron Starr*****************

Re: Reality of zero down - Posted by JoeS

Posted by JoeS on February 17, 2002 at 22:25:00:

Some years back Wade Cook wrote a book titled “101 ways to buy with zero down”, or something like that. I read it twice. While some of the methods written in the book are a bit far fetched, at least he gets your mind to think creatively! Many of them work. It is true that you can buy with nothing down, at least nothing out of your pocket. Yes, there are some expenses to consider, but there are expenses in driving your car around too! NOTHING in this world is free.
This is a great business, and you can learn so much from this site. Keep reading the posts and articles here.