If you've ever had insomnia and watched late night television
you may have seen the infomercials telling you that you can buy
real estate no money down. But can you really purchase
investment property without having any cash? The answer is,
"yes!".
Anyone can purchase property without having any cash, but it's
not nearly as easy as the gurus proclaim. Can you do it even if
you have bad credit?? Yes, but it's a whole lot easier to do it
if you have good credit.
In fact, with good credit it's easy to get cash when you buy.
Here's how you can get paid when you buy a piece of property.
Example: Property is for sale for $100,000.
1. You ask the owner of the property to give you a note for
$30,000 secured by other property you own or even as an
unsecured note (you can put a VA clause in the note allowing it
to be moved back to the subject after the closing). 2. You get a
conventional loan for 75% of the sales price. 3. You ask the
seller to pay your closing costs. 4. You ask the seller for a
carpeting allowance of $2000.
Here's how the deal works;
- You buy the property for $100,000. - You pay the bank on a
$75,000 mortgage. - You pay the owner on a $30,000 mortgage. -
The seller pays your closing costs. - The seller pays you $2000
for carpeting.
If the property is rented out for $1000, you collect the rents
and security deposits.
In the above example the buyer would walk away from the closing
with a $100,000 property, $5000 from the over finance, $2000 for
the carpeting, and $2000 for the rent and security deposit.
That's a total of $9000 for buying a piece of investment
property. NOT TOO BAD.
Will every seller be willing to do this deal with you? No, maybe
only one seller in ten or twenty will be willing to do this
deal. But there are sellers who will do this deal. What you have
to find is a motivated seller.
What makes a motivated seller?
- An owner who is in foreclosure. - An owner who got the
property as part of an estate. - An owner who no longer wants to
deal with tenants. - An owner who is in divorce. - An owner who
has been transferred out of state.
Now that you've bought a property and put money in your pocket
be prepared to deal with the tenants.
Good Luck!
About the author:
This article prepared by Real Estate Department of the
http://www.AllAboutCalgary.com the biggest portal directory in
Calgary, Alberta, Canada. Visit the Real Estate section at
http://RealEstate.AllAboutCalgary.com for more information about
Calgary Real Estates.
