No Cash? How to acquire Rental Properties with No Money Down!

[Joe J.]

Real Estate Investing has created and built wealth for so many investors over the years. There are so many shows on TV today that discuss flip, flip, flip!!!! YOU can make fast cash when you flip but it would also be nice to build and create future wealth. Do you want to own real estate? Do you want to have a portfolio of rental properties? Do you want to have that future stream of income coming in so you will not have to rely on that day job? If so what is holding you back from making it happen? Often many real estate investors tell me it is the money and they just do not have the necessary funds available to do buy and holds (rental properties).

There are a number of ways to find properties that could be a great buy and hold. If you are willing to do the work the reward can definitely be there!

1. Owner Financing.
Sometimes people will sell their property and finance the sale to the buyer. How can you find deals such as this? Look in the paper or on-line classifieds such as Craigslist and it may just say right in the ad as owner financing available.

2. The Property is listed For Sale and also For Rent.
This shows flexibility with an owner and anytime we see a property for sale and for rent at the same time there is a great possibility they will do owner financing.

3. Sandwich Lease Option.
You may be able to find motivated sellers that are willing to do a lease option. If you find another person willing to lease it from you then you could create a sandwich lease option.

4. Partner
Find a partner that is also interest in having rental properties and partner up with that person. They can put up the cash and you can find the deals. You can work out an arrangement to split the cash flow and profits when the property is eventually sold.

5. Cash Out Refis
Find a local bank that is willing to do no seasoned cash out refis and then find a great deal. You can use hard money, private lending or a partner to get cash to acquire the deal then turn around and refi the property to get the cash out and pay off your cash source.

6. Local Small Banks and Regional Credit Unions
Find a local bank or credit union that wants to get a property off their books. They may be willing to finance the property at 100% if they are motivated enough. Yes, I have had this happen on more than one occasion. 

Make sure with every potential deal that you run the numbers to ensure you have positive cash flow. Just because an owner is willing to finance a deal does not necessarily make it a great deal. Do your due diligence and the numbers will tell you if it is a great deal. The most important thing to remember is you are looking for sellers that are motivated! Motivation = flexibility!  

Good luck with building your real estate portfolio. A real estate empire is built one house at a time.  In the world of real estate you need goals and a system.  Your system could be like 4 flips might equal 1 rental property.  In the board game Monopoly, 5 green houses in 1 large Red Hotel!  Go make it a great day!  Believe and Achieve! :) - Joe  

[James Wise]

I have done my fair share of owner financed deals. I have done some deals that required little or no money.

Here is my take.

1. It takes a ton of money to do a no money deal. You need to spend $1,000's on marketing monthly and $100,000's to build a portfolio and track record that would allow other people to trust in your ability to pay them back or to make sure your in front of the motivated seller when they are ready to sell.

2. Anyone telling you anything different then number 1 wants to sell you a book, training course or coaching program.

3. The bigger the deal the easier it is to get it owner financed. This does not mean no money down owner financed but rather owner financed with a HUGE chunk of money. Sellers feel more confident in the buyers ability to pay them back when buyer comes to the table with 50k or 60k. Not much separates a tenant and an owner financed buyer who's got 1k to put down.

4. If you do end up in a little to no money down deal your not getting rich off of your cash flow. Your in this deal for the long term play and you likely overpaid. Your terms and sellers price. Just how it works. You dont get great terms AND a great price very often (if ever) & if you do its because you have already handled everything from number 1. Anyone telling you different wants to sell you a book, training program or coaching.