Would you acquire properties with full leverage, and zero down??

[Kyle Godbout]

Hi there.

I'm just wanting to know if this is something that other investors might pursue. I have been using the BRRRR method this year with good success so far. Once refinanced, I have at least 20% equity in my 3 properties I have acquired this year.

I have the opportunity to pick up two duplexes, side by side, with zero dollars out of pocket. The bank I use for my commercial loans will finance these at 80% of the purchase price and the owner will finance the 20% downpayment. After running numbers, I have figured that I will still cash flow approximately $350 per duplex, after debt pay down, 10% capex, 10% PM (even though I do this myself), taxes and insurance. I also believe I will be able to raise the combined rents from $2500 to $3000 within the next quarter.

The numbers aren't great, but I would get into them for no money down, which would enable me to use my available cash to find more deals. 

I would love to see if others would pursue something like this or if having no equity would be considered too risky. I'm in the Omaha, NE area too, which is pretty stable.

Thanks for your time! 

[Owen Dashner]

Kyle, assuming these properties are not in the hood and in terrible condition, I would do this all day long. Acquire a cashflowing asset in a decent area with zero money down? Yes please! You are going to get infinite returns with the cashflow, your debt will turn into equity as the tenants pay off the notes, you get to depreciate the assets to save money on taxes, you have the potential opportunity to boost your NOI by 20%, plus you keep your powder dry for other deals. If you have some reserves set aside for contingencies/repairs/vacancies, it's a no brainer.