No Money Down Real Estate - is This Possible?

Have you ever been awake at 1 or 2 o'clock in the morning and couldn't get back to sleep? What did you do? You probably got up and watched a TV show hoping you would get drowsy and fall asleep. At some point you've no doubt seen the infomercials telling you how you can buy real estate with no money down. You've no doubt questioned whether that was possible. The answer is yes.

It is very possible to purchase real estate with no money down. What the gurus who's selling his real estate course doesn't tell you is it is not easy to do so and requires time and a lot of hearing the word "no". If you do not have good credit, it is even harder. Don't let the difficulty of the deal prevent you from giving it a try. Isn't buying a $200,000 home with no money down worth it? You bet it is? Actually, in the example below, not only will you not have to put any money into a down payment, you can walk away with some money in your pocket.

Here's the situation:

There's a property for sale for $200,000. The seller is getting a divorce and is anxious to sell. Those kinds of people are called motivated sellers. There are plenty of motivated sellers out there. You need to talk to many people, but eventually you'll find a motivated seller. There are lots of people getting divorced, many people have to leave town for a new job or whatever, a good number of people inherit a house and have no desire to do anything with it except sell it fast, there are some people in foreclosure, and some people just want to sell quickly because of a family emergency of some kind. The point is you will find the seller who will accept the deal you're offering. So, you ask this motivated seller to give you a note of the property for $10,000. His investment will be secured by the real estate and you will give him a decent interest rate. You get a conventional mortgage from a bank of $160,000. You ask the seller to pay the closing costs. You also ask the seller to give you $3,000 for new carpeting and paint. You rent out the property for $1800 a month and collect a security deposit.

In this example what would happed at the transfer of title or closing as they call it in real estate circles?

The buyer, that's you, has title to a $200,000 home, $10,000 from the seller, another $3,000 from the seller for new carpeting and paint, $3,600 for the first month's rent and security deposit and no closing costs for you. That adds up to you walking away with $16,600 in your pocket and ownership of a home valued at $200,000. How many of these deals would you like to find? How about one a day, you say!

Now, the numbers are flexible here and negotiable, but the concept is what will allow you to not only buy a house with nothing down, you will also walk away from the deal with money in your pocket.