Does No-Money-Down Work...?!

[Ben Leybovich]

OK.  So - unless you live under a rock, you've by now listened to Podcast 108 featuring Grant Cardone.  If you listen between the lines, and you don't have to dig too dip, Grant has nothing particularly nice to say about the no money down strategy.  He makes this point of view known elsewhere as well...

Since you absolutely can't argue with Grant's success, and he absolutely must be taken very seriously, where does this leave Ben Leybovich and @Brandon Turner who are notorious on BiggerPockets for nothing short of nothing down?!

My thoughts:

Grant is not so much trying to create income in RE, but to change the face value of earned income in his businesses to RE income, which is not only taxed lower, but Grant feels is more stable.  To him, RE is not a stepping stone - it is the destination.  All good by me...

Now - consider myself.  I've built a portfolio of multifamily which has allowed\s me not to work for a living.  I pursued the nothing down strategy because it was the only option - I am not smart enough to start businesses and unfortunately, while I was quite good at playing the fiddle, because of the MS diagnosis I was unable to pursue that career (not that it would have been a career capable of generating any serous revenue anyhow).  

Jump to today - my partners and I are currently negotiating on a 90-unit out of state.  This means a couple of interesting things:

1. This deal, if it grows through, will make me, and the investors, some respectable money.

2. I have partners, without whom I could not do this kind of a deal at this point.  Both of these guys have more money and units than I do today (though this is not going to last).

Both of them, I'd like to believe, take me seriously...  Why - because I've done a lot of ****, and I've learned enough to not do even more ****.  They think I am not stupid.  

Guess what - I got smart doing nothing down deals...

3. I've been using OPM for 8  years now, and if this deal comes through, I'll be floating a PPM of $1,000,000+; I will raise $1 mil from investors who agree with my partners in that I'm not stupid and know what I am doing.

Guess what - I got smart doing nothing down deals...

To me - nothing down is not a destination.  It is a stepping stone.  I am going to turn 40 in March.  I have a portfolio (all bought with nothing down) that has allowed me to do vastly better financially than any music student I went to college with.  It has allowed me not to work and focus on learning RE, and it has bought a margin of financial safety for my family which is better than any of my friends...even those earning high incomes...

And now, I have put myself in position to do much bigger projects, which, after a few years, will begin to cash out big.  At the end of this road, I will be able to retire with free and clear A Class RE with the money I parlay from my syndication pay days...

All of it was teed up by having the audacity to not listen Grant Cardone and go for it in the only way that I could - No-Money-Down!

I've built a small business in RE.  Now, I am growing that business into an empire by re-investing the dividends from the business I already have.  There is some money I can throw around now, but mostly knowledge is the biggest dividend.   

Thus - while no one can disagree with success, I'll take a stand.  I disagree with Grant Cardone - No-Money-Down does work.  However, in this strategy RE is not the final destination, but a stepping stone to bigger and better things.  I am the poster child of this...

Thoughts?

[Ryan Billingsley]

@Ben Leybovich   I follow Mr. Cardone on Facebook and he just posted a video this morning  about how to buy real estate with no money down.  He mentions bigger pockets and said no money down is not his deal but he is going to help people buy a deal with no money down!  He must follow you Ben!  haha

[Ben Leybovich]

@Ryan Billingsley - can you share on my Facebook please?

[Ryan Billingsley]

Sorry, can not figure out how to post it here!!  haha  If you have a facebook account, search his name and it is his most recent post.

[Derrick Brown]

Nice reading. No one gives advice how to get in touch with NMD lenders or LEDs. My I get advice please thanks.

[Joe Cummings]

NMD, No Track Record, No Contracting Skills.

Why would anybody want to deal with you? What are you bringing to the table?

No offence, but I wouldn't deal with anyone with that resume, unless I had a fool proof plan to totally have them by the balls.

[Dave Salcido]

True successful investing in real estate to me is nothing more than proper use of available assets. So, what assets can, or better said, SHOULD be utilized to close a deal? Some investors have lots of money. Others have plenty of time. A few have the ability to structure transactions through creative innovation. Really, these are just tools of the trade. 

What then, is really needed to control a particular piece of real estate? If I were asked, which of the above mentioned  "tools" I would prefer, I would have to answer that with a question. Which tool or a combination of tools are best for giving all parties the satisfaction they seek? Ask the seller enough of the right questions and you may find that NMD is the best solution for his or her circumstances. You may also learn otherwise. There are a lot of conditions to a sale, but if you come into a transaction uninformed, you will not know what assets are necessary and you may be left with no ability meet the needs of the seller and everyone loses.

The most successful investors find ways to equip themselves with a tool belt with few empty compartments.

[Joe Cummings]

Let me tell you about this investor, we'll call him "A"

"A" owned a machine shop, he was a brilliant machinist. and locally an expert on the machinery he made parts for.

"A" was also a sharp business man, there are a few large industrial parks around here he built. 

So anyway, A always took back the note on the properties, and A looked for guys with big dreams, who were hard workers, but guys he figured, just couldn't quite "make it".

The guys he let in properties for no, or little money down would break their butts for a couple of years. "A" would even offer to help them by having them do work for him in lieu of making the mortgage payments.

And when things didn't work out, "A" would say something to the effect of, 

"Sorry things didn't work out for you. Don't worry about it. We'll call it even. Just give me the keys back, and I won't bang up your credit"

Lather, Rinse, Repeat