100% financing/low or no money down investing

I see a lot of posts asking if it's possible to get 100% financing or to invest with little of your own money. The answer is yes, it's definitely possible but the situation has to be right for the investor, seller, and bank involved.

Think about it, if it were easy for anyone to get 100% financing on every deal what's to stop every new investor from running out and acquiring every property out there?

Another big question is would you want to if you could. With 100% financing, unless your deal is really good, it is very difficult to get positive cash-flow. Would you want many of these deals if you lose money on every one each month?

With this post I'll document some deals I've done with 100% financing or low money down to give an idea of how this tool can be used to grow your portfolio in a smart way.

Usually, there are some extenuating circumstances that make these type of deals work for me and the sellers. Also, I have a long track record with the banks involved so they were ok with more creative terms.

Also, I should say it's hard if not impossible to get positive cash-flow with 100% financing unless you've found just a stellar deal so you have to be careful with it as you can easily find yourself losing money every month. I use positive cash-flow from the rest of the portfolio to cover any deficits and so there needs to be a reason why I accept one of these types of deals.

Sometimes it's just about growing my portfolio but it could be because I feel that I can buy at a very good price and get some immediate equity.

On to the deals...

Deal 1 - Was a Duplex I found that the out-of-state owner had abandoned because it was not performing. I paid $42,500. Bank financed 80%, owner financed 20%. I then spent $20k out of pocket to rehab it. It's now worth about $80k and rents for $900/month. This may not count as 100% because I have 20k of my own money into it. But I could have used hard money for that and refinanced, paid off both notes and pulled all of my money out of it.

Deal 2 - Is a higher-end house for my area in a subdivision where the values range from $150k-200k. The owner had been trying to sell for awhile at $180k. They were in a hurry to get out of the area and retire to their mountain home. They sold to me for $130k. Bank financed 80% and they held a note for 20%. The 20% note was for 5 years. I have it rented for $1275 and it loses a bit of money every month. But in 5 years it will be VERY cashflow positive. Also, it appraised for $150k at closing so I immediately gained $20k of equity.

Deal 3 - An out of state owner was selling 3 quadraplexes. I paid $400k with the bank financing 75%, the owner holding a note for 10% and I put down 15%. Total monthly rent is $5400 but the rents are below market and we expect to get them up to more like $6600. The property cash flows at current rents with the note at 5 years but will cashflow a ton once the second note is paid off and rents are raised.

Deal 4 - Was a foreclosed single family home I bought at auction for $35k. It had been abandoned for several years and needed a lot of work. I spent $17k rehabbing it and then placed a tenant for $750 per month. It appraised for $70k and I took a loan out for $56k. So after closing and holding costs, I actually have no money into this property. But note that I had to arrange interim financing during the rehab period and pay for rehab out of my own pocket so it wasn't 100% financed until after I was done.