Making Real Estate Money-No Money Down

Why You MUST Learn to Buy with No Money Down by David Finkel

It surprises many beginning real estate investors when I recommend  they get started investing without using their own money. They  find it hard to believe that sometimes having money can be  detrimental to learning to be the best real estate investor you can  be. It's just that I've seen money used as a crutch to make marginal  deals go through. I know I've been guilty of getting lazy and  throwing money into a deal where a little more imagination and  prudent negotiation would have served me better. With an open  mind and the right education, no money can be a force to push  you to be a faster, more creative, and more skilled investor. You'd be surprised how fast you can pour your liquid cash reserves  into real estate. I've watched traditional investors pour over  $1 million into several deals in a matter of months, then have  to wait until those properties sold before they could free up  enough of their money to go out and buy more properties. You'll never regret learning to buy with no money. It will make  you a much more savvy investor for those times you do decide  to use your own money or conventional financing. Money is never the issue when buying a property Many investors think that money (or lack of money) is what stops them from closing a deal. This MYTH is one of the most  limiting things that holds some investors back. Understand that money is NEVER an issue—IF the deal is right. Say the following words to yourself over and over: "If the deal is right, I will find the money!" If there is a deal there you can and will find the funding. The key is that the deal MUST be right. That means for a cash deal  (usually the kind where investors think they haven't got the  cash to do the deal) that you need the right price. This means a price at MOST 70% of the conservative "as is" value  LESS any needed repairs. This means you have to go in at 29.95% to leave yourself room to negotiate if you need to. This kills many  deals. That's okay. The ones you want will work out. And you will find a way to fund them. How do I get the money to fund the deals? Okay, so you've got yourself a signed contract on a great cash deal.  Now you need to find the funding. Again, the key is that the deal is  conservatively very profitable and will make you money even if you  made a few mistakes. Here are several sources you can use to make that deal a go: Use the seller's existing financing for part of the purchase price. Buying "subject to" you only have to fund the money for the  seller's equity! Get a cash buyer at 90% of value and do a simultaneous close  or flip your deal to the buyer for a cash assignment fee Sell your contract to another investor, again for a cash assign- ment fee. Borrow the money from a private party lender at an interest rate  3% to 5% higher than a bank CD and secured by a first mortgage Borrow the money from a hard money lender Tap into a home equity or other line of credit Refinance another property to get your down payment and borrow  the balance from a lender Bring in money partners to fund the deal. (They get depreciation and you control deal. They secure themselves with a first mortgage for the amount they have in, or if they finance it, they can lock in a second mortgage to protect themselves. You agree they get their entire principal back PLUS 15% before you split any profits from the resale of the property. You split profit 25% to 50% to them, the rest you.) I think you get the idea here… The key is that if the deal is right, you WILL find the money. Never lose sight of that. The only two reasons why this wouldn't be the case are fear and ignorance. About the author... David Finkel is an ex-Olympic level athlete turned real estate millionaire and one of the leading investing experts in the nation. He is a Wall Street Journal and Business Week best-selling author of over 40 business and investing books and courses, including the wildly successful, Real Estate Fast-Track and The Maui Millionaires. His website,  www.MauiMillionaires.com, is a popular site for investors and entrepreneurs on the web and has dozens of free wealth tools and ebooks.