All Forum Posts by: Ed Poltonowicz

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It is an amazing house. It was built by a wealthy Philadelphia doctor in 1891 as a wedding present for his son. No expense was spared; 20 foot high turrets, stained glass windows, molding, etc.

Although it is in a very nice suburban borough, it is no longer the type of neighborhood that would support a home of this magnitude. Approx 40 years ago it was converted into 8 apartments. The rents range from 750 for an efficiency, to $1350 for a 3 bedroom.

Finally closed on the deal. The appraisal took forever.

Okay, no one liked that one, so here is another no-money-down deal I did:

This was 8 years ago. The seller wanted 250k for a 6 unit building. I offered him 265k if he would hold 75%, 6.5%, 20 years. He was fine because he did not want to get hit with cap gains tax, he wanted the money for retirement, so my payments became his annuity.

I did not have the 25% down that he wanted, so I made a proposal to a guy I golf with: I would give him 9.5% on $65k, 5/15, second position. It was a ridiculously high interest rate but the numbers on the building still gave me positive cash flow with 100% financing. He was thrilled with the deal.

That building is now worth $500k and has had positive cash flow every year since.

I did another deal, 12 years ago, that actually was no money down, but it was unusual. I had been renting 4000 sq ft of commercial space from a landlord for 15 years. He decided he wanted to sell the 4 unit building and I was the perfect buyer. Except, I had no money for a down payment.

The seller wanted to hold paper so he did not get hit with all the capital gains in one year. Since he knew my reputation for always paying on time for the past 15 years, he agreed to $175k, zero down, 6.5% for 10 years. In return I agreed that I would repaint the building and do some neglected maintenance over the next two years, increasing the value of the building. Basically I promised to put in some sweat equity after the purchase.

He benefited by not needing to do the repairs before putting it on he market (about 10k) and not having to pay a realtor (8k). All it cost me at settlement was transfer taxes and title insurance.

Of course the only reason this worked was because I was his tenant for 15 years and he knew I was worth the risk.

I am currently doing a deal where I pledge equity in a building that I own instead of putting money down. I am walking into a $750k property and will only need about 20K of my own at settlement. Not exactly no money down since I am pledging equity but it is no money down to me.

For the same property I had another lender lined up who was going to loan me 70% with the seller holding 20% if I put 10% skin in the game.

Low to no down payment is possible with a little creativity.