$0 Down - Bank didn't laugh at me!!!

[Landon Elscott]

So, recently my wife and I made an offer on our first income producing property. It was something that we had been wanting to do for a long period of time, but in April of 2013 we had a baby and between medical bills, furniture, and all these "must have" toys, our down payment money was quickly eaten up and our dreams of purchasing a rental house seemed to be temporarily on hold. Don't get me wrong, having a daughter has been an overwhelming joy and I felt blessed my wife wasn't stereotypically suggesting for me to sell my beloved Mustang Cobra!

Then in November 2013, we drove by this cute little home and once again all these dreams of real estate investing came flooding back into my mind and I convinced myself I was simply going to sell my Mustang once spring rolled around to fund a down payment. But by February of 2014, with the cute little home still available and dropping in price, I decided to just contact a local banker and explain the situation.

To my amazement, the banker (he himself a landlord of 5 properties) was completely on board with the idea of going $0 money down, so long as I could get it for below 75% LTV. Ultimately, he said it'd have to pass an approval process beyond him, but based upon my existing net worth (roughly $25,000 at age 25 between our personal home equity, cars, etc) he wouldn't be surprised if it did work out.

Maybe this doesn't come to a surprise for some of you, but from what the real estate agent said, once they accepted our offer of 70% LTV ($38,500), and I told him my objective was to go no money down, he said the bank would probably just laugh at me - "they just don't do that stuff these days!" But as I explained, it was quite the opposite and the US Bank Small Business Loan Officer was actually very engaged and interested in my cash flow analysis, seemed extremely pleased with the purchase price, and said he thought it seemed like a pretty sound investment for me. Perhaps what surprised me most was that it wasn't just some small community bank or credit union humoring me.

Anyways, I submitted all my tax information and other paperwork today and should hear back sometime next week. Will keep you all informed.