Many beginning real estate investors have preconceived ideas as to how no down payment real estate investing is actually done, but chances are many of your perceptions are wrong.
There are numerous ways you can buy real estate with no down payment. Some of these ways include getting seller financing, doing a lease option, buying a property using private money, or assigning a property wholesale.
Can The Seller Still Get Cash?
One misconception many people have is that “no money down” means the seller does not get any money, but this is not always the case. It just means that you as an investor are not going to take money out of your pocket to buy the property. Many times, the seller will get money and this money could come from any number of sources. The money could come from a loan you borrow, or the money could come from your end buyer (if you are doing a wholesale flip). In a case where the seller holds a seller held mortgage, you could help the seller sell some of the payments on the note to a note buyer.
O.P.M. – “Other People’s Money”
As the old saying goes, “it takes money to make money”. However, the money it takes does not have to be your own. It can be OPM (other people’s money), or even other people’s credit.
Just for starters, the OPM you use could be money from a private lender or partner, and even could be the seller’s existing financing. There are numerous ways you can make money in real estate without taking money out of your own pocket or using your credit. By the way, if you want to become truly wealthy in real estate, you must learn how to use other people’s money to do it.
So, it doesn’t take your own money to make money, it just takes the knowledge of how to make money either without using money, or by using other people’s money.
To learn more, start by clicking the sub-topic tags for the blog in this post or searching this site about partners, private money, hard money, joint ventures, lease options, options, wholesaling, and wholetailing. These are just some of the deal types that can be done with little to no money of your own and many times without credit.