- Originally posted by kay henry:
If a bank won’t lend you enough money, then isn’t that some indication that you are in over your head?
Not necessarily in over your head. I am currently paying about $1440 a month rent, saving $500 a month and also having 5% of my pretax pay buying shares in the company I work for and chucking in a small bit extra for super each year, yet I am sure the banks will have a cry at the fact that there is a spot on my credit rating incurred during my divorce when my ex defaulted on a credit card he was supposed to pay out….I would love for someone in my area to offer me vendor finance [biggrin]
Originally posted by redwing:Don’t you hate it when [grad]Still In School Goes all *cryptic* !![fear]
There are other ways, but there are more risker… back to the cryptic talk… [strum]
nad tehy od wrok, tohugh oyu rae tkiang bgiger rsik… [stun]
Cheers,
sisJust because you are not putting any money into the deal doesn’t mean there is no deposit or that the deal is overyour head.
Cheers
Leigh K[biggrin]Originally posted by redwing:Don’t you hate it when [grad]Still In School Goes all *cryptic* !![fear]
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
[strum]
Kind regards
Chan Dollars
[Retire Young, Retire Rich] [strum]Originally posted by kay henry:wrappack said:
ii) 100% vendor finance. If the vendor will lend you the money, you may not need a deposit
iii) 30% vendor finance. Bank lends 70%, vendor 30Those are really good ideas, wrappack. But re getting vendor finance… presumably that would be suitable for those with no equity (who could use one of the other options), but my question to all is: isn’t it better to either have equity or a deposit? If a bank won’t lend you enough money, then isn’t that some indication that you are in over your head?
What do people think?
Also, re vendor finance, does it appear on your credit rating? And are the people providing the VF able to check your credit history? Wouldn’t this be ruled out by the privacy act?
Another way to do the no money down thing is to go into a joint vewnture- think of the second person you’re in with as providing the deposit for you.
kay henry
Sometime when bank don’t lend you money does not mean you can’t support your investment or get over your head. It just that for people like self employ, previously bankrupt….
Kind regards
Chan Dollars
[Retire Young, Retire Rich] [strum]Originally posted by LeighK:Just because you are not putting any money into the deal doesn’t mean there is no deposit or that the deal is overyour head.
Cheers
Leigh K[biggrin]no money down = $0 down.
over your head = bankrupt tomorrow!Kind regards
Chan Dollars
[Retire Young, Retire Rich] [strum]I suggested that the following two options might be getting in over one’s head:
ii) 100% vendor finance. If the vendor will lend you the money, you may not need a deposit
iii) 30% vendor finance. Bank lends 70%, vendor 30kay henry
I suggested that the following two options might be getting in over one’s head:ii) 100% vendor finance. If the vendor will lend you the money, you may not need a deposit
iii) 30% vendor finance. Bank lends 70%, vendor 30kay henry
That is looking at both of those option in a one dimensional view. Just becasue they are called “vendor finance” doesn’t mean the person cannot get finance or that they don’t have the funds to acquire the property, it may be a method of holding the property until a time when you are ready to use your own funds to do the deal or until you have some others deals put to bed before you go back to the bank.
Vendor financing the deposit which is known as a second mortgage is very common, Both options are a form of leveraging!
Cheers
Leigh K[biggrin]Over ones head could mean a couple of things. Lets say you were in debt 45k, and wanted to borrow 100% (be it 10/20/30% vf) Is this too much? Kay may believe so (and so would I in most situations)
But what if the client was a recent medicine graduate with 45k of hecs, not a dollar to his name, and about to start a job paying 100 grand minimum. In that scenatio, I would think that sooner would be better than later
redwing,
sis who?
Just confirming that the book Steve refers to IS Robert Allen’s book “Nothing Down for the 90’s”. I believe there is a prequel and sequel to the book. I haven’t seen it around much – probably the best places to try would either be online through a site like Amazon, or through a large chain like Borders.
Also, make sure you check out the article which Steve wrote on creative financing at https://www.propertyinvesting.com/strategies/creativefinancing.html – it’s well worth the 10-or-so minutes it takes to flip through and think about.
Brent Hodgson
PropertyInvesting.com
Admin ManagerI’m going on a property buying tour!
Want to receive the e-mail diary of my trip, hear about some of the great Positive Cashflow deals I find, and perhaps discover some great opportunities for yourself? e-mail or PM me!
wrappack,
When one adds in the 100k income, then it makes all the difference. I guess I am referring to the people who have very little income, with little likelihood of an increase in the near future, who wishes to borrow a fair wack of money. I could change those figures to a person borrowing 200k and earning 30k who has a couple if kids. They have no savings, so they borrow the whole amount, via vendor finance, for example. I think that’s risky.
No money down can be simply a matter of us using equity from our current assets. That’s not *really* no money down. It’s using our current money (equity) to buy another IP.
kay henry
You must be logged in to reply to this topic. If you don't have an account, you can register here.
