Ways to Make Money Without
Money
They're sold on late-night TV, hawked at seminars, they sell
in books, and, admit it, you've wondered about them--those programs that tell
you that you can make a fortune investing in real estate with no money down. Is
it true? The answer is, yes, but if you can find an undervalued property, use
somebody else's money, or do a sub2 deal (check your glossary at the website if
you're unsure about that term), it's relatively easy. Undervalued properties are
somewhat hard to come by in these overvalued days in most areas, unless you're
ready to do some serious rehab work or have a keen insight into market trends in
a specific area.
If you can find an undervalued property, use somebody else's money, or do a sub2
deal (check your glossary at the website if you're unsure about that term), it's
relatively easy. Undervalued properties are somewhat hard to come by in these
overvalued days in most areas, unless you're ready to do some serious rehab work
or have a keen insight into market trends in a specific area.
And, most lenders want you vested in the deal with some significant
cash--understandably. Why should they take all the risk? At the very least,
they'll want you to be able to show that you can maintain the property until it
turns around or that you can turn it over quickly and profitably (which usually
means selling it to somebody willing to pay a premium because of less-than-great
credit).
BUT, don't let this discourage you. Instead, let it sharpen your insight as to
what makes for a good deal, understand how lenders view them, and think
creatively about financing so that a good deal can be had by all. Here's one
way.
Find a motivated seller, and line up a partner who's seeking a good return. From
an LLC with the buyer. Have the LLC buy the property at a discount from the
market rate in your partner's (the buyer's) name--it's his money, after all.
Next, run a "for sale by owner" ad, stating that "poor or no credit is okay."
Your phone will ring. They'll pay more to get in, but they'll have to be able to
pull together a decent (10% or more) down payment and have a solid job. Your
investor partner gets that cash to get his investment back. Then, sell the
property to the new buyer and split the monthly cash flow with your partner.
You can repeat this process a few times and have a significant monthly cash
flow, all with no cash from your pocket. Your contribution will have been
putting the deals together. So, yes, "no money down" can still work, if the
right people are in the picture. Keep your eyes open for possibilities, your
contact list current, and your ambition level high, and you can do it.
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