No money down funding options: HML, Private Lenders...At least one exists. Do others?

[CJ Edenfield]

I recently attended a seminar where a popular TV couple was the sponsor. Now, before we get rants regarding the levels and $$ they ask to shell out for training etc...my interest in this post is targeted to understand if there are other funding methods similar to what they are offering. I understand that anything a Guru or training class can teach can also be learned here on BP. I am interested in their funding option.

However, as a new investor I have read, researched my market and different funding options as much as I can while trying to digest it all. That and searching for a way to fund my first deal. I have begun to develop some relationships here as well. I am not really a novice in the real estate world but certainly a first time investor. Like many us looking to "get in the game" I don't have the cash necessary to put skin in the game for a hard money lender or for a down payment and while all the no money down options, like lease options are awesome, they are relatively hard to find and even more unlikely to close as a newbee. So, a more traditional flip or wholesale deal are more likely to get us started.

For me, I understand how the numbers work. I'm an accountant and as stated on BP many times the math isn't super complicated. If I miss something it is simply because I am new and need a little seasoning. I say that to say I feel confident, not arrogant, I can evaluate most of the deals I put together with reasonably expected cost and profit. (On to my question)

So, the funding option available after the training is 2-3% interest each month on a 3-day or 90 day loan with what sounded like options to extend a month or so if approved - with no money down, no credit check (important for some - not me), no income verification etc. (3 year option also available) The loan is based off of the property and it's value. The money is obviously private money. Basically these sessions and training are a way to gain trust, provide the lender with some confidence that the folks they are lending to have an understanding of what they are doing at some level... all in an effort to get them to allow them to fund their deals. Each deal that is submitted is also reviewed for certain criteria such as....any deal under $100K must have at least a $20K minimum profit (which is doable in many deals I have actually put together) or any over $100K must have a 20% profit. Now I understand that the 2-3% per month is expensive money, 24-36% annualized. Anything from 10-18% is a typical HML so I get it. It's not cheap..... It also is, possibly, the only offer I have seen that allows for the full cost of purchase and rehab to be financed without any money down. That is not important for most. It is for someone who is starting out. The term is definitely a risk and can be a short turn around on a flip but it is really hard not to consider. There is a risk from the lenders perspective because they know many of the people they are funding at first are inexperienced and while they are hedging their bets a bit by requiring certain profit levels and requiring high interest rates it seems...understandable, maybe, because these folks don't have easy access to the capital otherwise. Ultimately, the $2K that must be paid to go through the training is more an access fee that allows you to go to their lenders and get loans to fund deals that otherwise were out of reach. By the way, the $2K is refunded if the first deal is done in 90 days. A drop in the bucket if $20K profit is required but it is at least something I guess. Anyway, all this is to ask if there are other programs or lenders out there that provide loans with no money down. If so, I would love to hear about them. If not, are there any other options that HML or private partners/lenders provide that allow access to funds for investors that isn't 10-20% or more of the total cost?

While the option presented is expensive...a just as risky option, IMO, is to get a 0% APR credit card, transfer a big balance off of it to my account and use that as my skin in the game for a HML.

What are your thoughts? All responses and information are appreciated. Thanks