Hi everyone,
I have recently started my investing career, and being young I have little to no cash to play with so I am looking for some no money down strategies. I have been focusing on lease options. I did my first mail out approx 2 months ago which was moderately successful - my response rate was approx 90% but (understandably) most sellers were motivated but required their cash upfront. I am now looking for a way to capitalise on some of the leads I generate where a lease option isn't suitable for the seller. I have been looking into wholesaling but given that my market is a lot different to the US the traditional wholesaling model isn't really viable here in Australia.
So basically what I intended to do was negotiate a property at a discount and then try and flip it to an end buyer who has conventional financing but does not have a sufficient deposit. For example I would find a property with an asking price of 450k and then negotiate a sale price of 400k. I would then offer the property for sale with deposit finance for 475k. The end buyer would obtain traditional financing for the property (80% of 475 is 380), and then their upfront deposit of ~20k will be put towards the purchase price. The seller receives their 400k and then I would then collect payments from the buyer on the spread I have created.
This concept works in my mind, but from what I have read so far banks aren't willing to finance properties which involve the assignment of a contract. Is there anyway to get around this? Perhaps through an option contract and then some sort of contract between me and the seller once the contract of sale has been signed between the seller and the buyer? It sounds messy but the potential income stream sounds worth it to me.
Thanks for any help,
Dan
