6 Ways to Collect Cash When Buying No Money Down

By definition, a real estate investor puts up some money and “invests” it into real estate deals. As a real estate “entrepreneur,” I prefer to avoid tying up any of MY money in my investments.

In fact, I prefer to collect some of my profits on the same day I buy a house. That way I don’t have to be in a hurry to sell. Then I have money to further my real estate education, pay my operating costs, have money for property needs and holding costs and invest in systems to grow my business… and write myself a paycheck!

Now, I’m willing to wait for my profit on the back end. And I’ll even consider “investing” small amounts into a house like a small down payment plus money for holding and touching up the property. Ideally though, I’ll want to quickly get MY money back out when the house is occupied by a buyer or tenant buyer.

There are many different approaches to real estate investing. And I certainly don’t have the perfect plan. Your approach will depend on your own personal desires and skill set. But to put these “collect cash when buying” strategies into context, I’ll briefly describe my real estate business…

I buy mostly single family homes. I rarely buy houses listed with real estate agents unless it’s an all cash deal. I prefer to be negotiating directly with the owner.

I don’t use my good credit or banks to finance my purchases. Typically I acquire homes taking them “subject to” the existing mortgage using a land trust or agreement for deed or I buy free & clear houses where the owner is willing to hold the note. That means I get no bank qualifying owner financing. For cash deals, I use hard money lenders or private lenders.

Here are 6 ways to get cash out when you close:

1. Over borrow with no bank qualifying when paying all cash

2. Over borrow with no bank qualifying when buying with owner financing

3. Over borrow with no bank qualifying, buy with owner financing and substitute other equity as collateral.

4. Close only when you find your buyer

5. Require the seller to pay you when buying the house - this works when taking over subject to and the amount owed may be close to market value.

6. Simultaneously buy and sell for cash… Bonus Strategy!

There’s no limit to the number of houses you can "invest in" when you buy AND collect cash at the same time.

The top reason real estate entrepreneurs sell off a house is for cash. Use these ideas when you have the opportunity to supplement your monthly cash flow needs. Then you can keep more houses, enjoying additional real estate benefits including depreciation, appreciation and principal pay down… helping to build a bright financial future for you and your family.

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