Financing-no money down

[Jason Deutsch]

Has anyone purchased a property without any of their own personal money down via a loan with a partner, hard money lender, bank? What are some of the better options thru your experiences? Thanks appreciate all the feedback. Rookie from North Jersey

[Swat Khan]

I know that that this thread is a few months old, but just wanted to chime in. 

I can speak from experience that it is possible. For me, I've done them with 20+ multifamily and SFR. The key is structuring the deal or "transaction engineering" and marketing yourself.

It all starts now and you want to just get out there and just start closing transactions to build a track record. You learn the most through transactions and you start thinking creatively. 

Your primary goal if you decide to do little to no money down is to establish credibility first and find motivated sellers. 

@James Wise is right, start doing a few small deals. If you are starting with little money work on your credit score and get a line of credit through an LLC.

Work with local credit unions and hard money lenders. With banks, they will want to see tax returns and credit reports, so this is where your networking will come in and partner with a credit partner and show 19% ownership for you (they won't check W2 and tax returns on partners below 20% ownership) and show 81% ownership to your credit partner who will use his credit to get the loan. This is just the ownership, which means you still negotiate the cash flow and equity on sale (50/50, 70/30, 20/80). All of it is negotiable. But focus on getting better and better at servicing your customers, this is your banks, sellers, and partners.  

Find hard money lenders who will do 65% of ARV with little to no money down. Find deals that are 65% ARV including repairs.. meaning 65% of ARV - repairs = your strike price. You are creating value for your hard money lender.

The key is to get your name out there and let people know what you're doing. Your network will eventually build up and you will have the right pieces to get deals done. There's definitely people out there who want to give you money if you do what you say, say what you do and can demonstrate you know what you're doing. 

Those are just a few of the many ways.