I see all of these infomercials that talk about how easy it is to invest in real estate with little or no money down. I was just wondering if anyone has tried this, if so does it work and how?
3 Comments to “I was wondering if anyone has done real estate investing with the “no money down approach?” How does it work?”
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VaTreasures said:
On July 30th, 2008 at 7:41 am
I doubt they have any great secrets. While real estate seems like a great way to make a quick buck, it requires a good amount of work. You also need to be sure to plan properly when you work out your budget for the property(iinclude all expenses and expect some vacancies). In today’s market you will find few if any properties that will work at their initial aksing price. This means you will have to make a lot of low ball offers and few of them will likely be accepted.
Most decent real estate advice recommends starting with a home that you live in first and then rent rather than sell when you move out. This helps you get off to a good start because you are financing it at an occupant rate rather than an investor rate.
emotionally_wreckless said:
On August 1st, 2008 at 4:07 am
My husband and I bought a repossessed house from Fannie Mae about 3 years ago. It was slated to be auctioned on the courthouse steps to the highest bidder. The house was appraised at $40,500 dollars “as is”. We made an offer through the real estate agent it was listed with using a 100% loan. We paid $28,500 for the property. We’re now planning on selling it at at least a $15,000 profit.
The key is to find foreclosed and repossessed properties that are for sale. (Which are owned by the previous financing bank or government entities like Fannie Mae and Freddie Mac) These banks and the government don’t like these houses on their books any longer than necessary, and are usually willing to sell them for less than they’re worth, just to get them off their hands. All you have to do is find these houses, which you can do through any real estate office, and find one you like within your payment range. Then, find a bank which will lend you 100% of the purchase price. This part may be the most difficult, as you need pretty good credit to get these types of home loans. When you find one you want, get the loan, and you make an offer. Any knowledgeable real estate agent could walk you through this process, and there are even many agents who deal with repossessed houses exclusively.
With a little elbow grease, you could own a home for yourself, to rent out, or turn it over quickly and sell it at a pretty decent profit.
Best of luck to you.
freedomhammer said:
On August 4th, 2008 at 1:08 pm
If it seems to good to be true then where’s the catch? I have owned apartment buildings before, and if you are around long enough you get to know people in the banking business. At one point I got to know the vice-president in charge of real estate at Hudson City Savings Bank in New Jersey. I had already been a party to one transaction with the bank, a 29-unit half-abandoned building in Jersey City. One day he offered me a property, and suggested I go take a look at it. Turns out it was a massive brick apartment building, totally abandoned, sitting on on entire city block just off Bergenline Avenue in Jersey City. As I recall it had something like 42 apartments. He offered to sell me the building for just one dollar.
I turned him down. That is as close to ‘no money down’as you can get, heck, this was no money at all, yet even at that price it was a terrible deal. Sure, you can get these things for no money, I’ve been there, but you better have access to massive amounts of capital for renovation and upgrades, and I’m talking anywhere from tens of thousands to millions. If you don’t have the means to carry it and improve it, you better think twice before you get into something that can literally slay you.
A lot of the real estate moguls who sold seminars on no money down deals in the late 70s and 80s ended up bankrupt, which ought to tell you something.
On July 30th, 2008 at 7:41 am
I doubt they have any great secrets. While real estate seems like a great way to make a quick buck, it requires a good amount of work. You also need to be sure to plan properly when you work out your budget for the property(iinclude all expenses and expect some vacancies). In today’s market you will find few if any properties that will work at their initial aksing price. This means you will have to make a lot of low ball offers and few of them will likely be accepted.
Most decent real estate advice recommends starting with a home that you live in first and then rent rather than sell when you move out. This helps you get off to a good start because you are financing it at an occupant rate rather than an investor rate.
On August 1st, 2008 at 4:07 am
My husband and I bought a repossessed house from Fannie Mae about 3 years ago. It was slated to be auctioned on the courthouse steps to the highest bidder. The house was appraised at $40,500 dollars “as is”. We made an offer through the real estate agent it was listed with using a 100% loan. We paid $28,500 for the property. We’re now planning on selling it at at least a $15,000 profit.
The key is to find foreclosed and repossessed properties that are for sale. (Which are owned by the previous financing bank or government entities like Fannie Mae and Freddie Mac) These banks and the government don’t like these houses on their books any longer than necessary, and are usually willing to sell them for less than they’re worth, just to get them off their hands. All you have to do is find these houses, which you can do through any real estate office, and find one you like within your payment range. Then, find a bank which will lend you 100% of the purchase price. This part may be the most difficult, as you need pretty good credit to get these types of home loans. When you find one you want, get the loan, and you make an offer. Any knowledgeable real estate agent could walk you through this process, and there are even many agents who deal with repossessed houses exclusively.
With a little elbow grease, you could own a home for yourself, to rent out, or turn it over quickly and sell it at a pretty decent profit.
Best of luck to you.
On August 4th, 2008 at 1:08 pm
If it seems to good to be true then where’s the catch? I have owned apartment buildings before, and if you are around long enough you get to know people in the banking business. At one point I got to know the vice-president in charge of real estate at Hudson City Savings Bank in New Jersey. I had already been a party to one transaction with the bank, a 29-unit half-abandoned building in Jersey City. One day he offered me a property, and suggested I go take a look at it. Turns out it was a massive brick apartment building, totally abandoned, sitting on on entire city block just off Bergenline Avenue in Jersey City. As I recall it had something like 42 apartments. He offered to sell me the building for just one dollar.
I turned him down. That is as close to ‘no money down’as you can get, heck, this was no money at all, yet even at that price it was a terrible deal. Sure, you can get these things for no money, I’ve been there, but you better have access to massive amounts of capital for renovation and upgrades, and I’m talking anywhere from tens of thousands to millions. If you don’t have the means to carry it and improve it, you better think twice before you get into something that can literally slay you.
A lot of the real estate moguls who sold seminars on no money down deals in the late 70s and 80s ended up bankrupt, which ought to tell you something.