Hi everyone,
I’m still trying to get my head around these no money down deals. Could someone please explain to me in point form, how you go about negotiating these deals and give some examples of how it works?
For example, if I was to purchase a property for say $100 000 and asked the seller to leave some money in the deal (20%), how do I negotiate this and how do the calculations work if I agreed to pay them 6% on the money they left in??
Do you need to explain to the banks why you only want to borrow 80% and that you actually don’t have the cash for the deposit?
Any help would be apprciated.
Thanks,
Ian [mellow]
I think its to do with vendor financing. You will get some assistance from Steve’s first book on this one. I am pretty sure I have read about it in the book. It is a must read
JUlES [angel]
JULES1
Email MeHi Jules,
I have read steves first and second book, and also a number of Robert Kiyosaki’s books, but I still fail to comprehend it.
Maybe I’m a bit simple [lmao] [cowboy2]
Okay how the figures work:
$100K property, 20% deposit which is provided by the seller, 80% through the bank.
A contract is formed thats between you and and the seller in which you promises to pay them $XXX amount per month. This is just like a loan, usually you include an interest rate and a time period.
To protect their interest the seller might place a cavet or a 2nd mortgage over the property to protect their interests.
To the bank it looks like you have got the funds to pay the 20% deposit, so of course they lend you the 80% required (but instead of it being provided you it has been provided by the seller). The bank takes first mortgage over the property
As for how to do, you need a flexible seller who wants to sell, and a good lawyer (who focuses on investors) and a good mortgage broker (again one that focuses on investors).
This is roughly how a no money deal works. Of course other examples of a no moey deal might be buying a property (say for $100K) ordering a valuation ($120K) and then after you have bought the property go for an increase based on the valuation (so if yo had put in $13K, you would get your moeny back, hence a “no-money” deal). Of course you still need funds to complete.
Rgds.
Lucifer_auThanks Lucifer your a champion [cigar]! That helps. As for ordering valuations on properties well that’s a bit of a sore point with me. [angry2]
Check out another post of mine titled ‘dodgy advice from outback bank staff’.
Thanks,
Ian
nothing down on property is generally not going to happen from any standard institutions. There may be some hard money out there if your buying the property 35% or more below its market worth.
If you look you should be able to find between 75-80% financing on commercial property without to much difficulty, A good mortgage broker should be able to help. Talk to the owner and see if he will carry back a second mortgage for 15 to 20% to make up the difference.
I would be curious on any details you have on the property. Income,expenses, asking price, and market value.
Good luck.
how to generate perpetual cash flows ?
http://www.unitoday.net/healthyjack/mystory_en.cfmYou want to invest but have little money or credit. Figure out what you DO have to contribute then find someone with the money to be a partner or investor.
Ask yourself -” who can I find to be a partner who has money and credit- but no time, motivation, or specialized knowledge?” (which means you need to have time, motivation and specialized knowledge)
You can a list and contacted the people who you think might have money to invest. you can simultaneously start looking for properties with problems- preforeclosures, bad management, fixers, etc. I then started making fliers- for free at the library- for people who wanted to buy via lease option and had them call and leave a message with a family member who had a phone.
Tell your investors your plan and say- “Hey look- I’m just starting out. I can understand that you probably are interested but are worried about my lack of experience. That’s understandable. I’ll make this a no risk deal for you- I’ll put in all the work and…. I ONLY GET PAID IF YOU DO! If there’s no profit I don’t get a cent- If there is we split the profit 50/50”
Hope this helps
how to generate perpetual cash flows ?
http://www.unitoday.net/healthyjack/mystory_en.cfm
You must be logged in to reply to this topic. If you don't have an account, you can register here.
