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by Dennis Henson
real estate investingIs it possible to buy property for no money down? Of course – there are many ways to totally finance the purchase of real estate. It just takes some imagination and some O.P.K. (Other Peoples Knowledge).Here are six ways to buy property using very little or none of your own money:
#1 Owner Financing A fast and easy way to acquire financing is by persuading the seller to finance the purchase. Look at all these benefits:

No Credit Check
No Loan Apps
No Banks
No Waiting
No Closing Costs
No Stress
Better Interest Rate
None of Your Own Money

The only problem with this tactic is that it is sometimes harder to achieve than some of the more conventional methods. But it can be done if you find a truly motivated seller.

#2 PartnersAnother great way to purchase with none of your own money is by using partners. This too has many benefits.

No Credit Check
No Loan Apps
Less Waiting
None of Your Money
Better Rates
Easier to Find

But this tactic has a few more drawbacks such as:

Some Paperwork
Banks Maybe
Some Closing Costs
Less Profit for Yourself

How would a partnership work? You have to make a plan that will be good for you and attractive to someone with money. One way could be you do all the work and your partner provides all the money. Now you only have to decide how you will divide any profits the property produces.

Who might be prospective partners?

Anyone with money
Professionals–Doctor Dentist Accountant
Club Members

What would attract a partner?

Good deals
Tax breaks

Just be sure to get everything in writing before you start the deal. And please consult a good real estate attorney to help you organize the partnership structure and the partnership agreement.

#3 InvestorsUsing investors is also a great way to finance your real estate deals. You just pay them for the use of their money and you get to keep more of the profit than with a partner.

What will attract investors to your deals?

A good return on their investment

What are some ways to find investors?
Run ads in papers and tabloids
Put on your business card
Put out brochures in professional offices
Put out brochures in public places
Talk to everyone you meet about investing Go to investment clubs meetings
Research the web Again be sure to get everything in writing before you take any money from an investor and be sure to consult a real estate attorney to help you with the paperwork.

#4 Subject To“Subject to” means that you purchase a property–leave the existing financing in place. The purchase contract would specify that you are buying the property “Subject to” the existing first and or second mortgage.

Is this legal? My attorney says “yes” but check with your attorney. Is it wise? That depends on how you write the terms of your agreement with the seller. You need to be sure that you will be able to pay that mortgage payment on time every time. As long as you pay on time everything should go smoothly. But you risk loosing your equity should you fail to make the mortgage payments.

Here are a few of the benefits of the “Subject To” tactic.

No Credit Check
No Loan Apps
No Waiting
No Closing Costs
Does Not Show up on Your Credit
None of Your Own Money


A Bank is involved
There can be stress
Proceed very carefully

#5 Credit CardsAnother way to avoid using your own money for buying property is by using credit cards. You never know when a great deal will pop up and take my word great deals must be grabbed quickly or they will disappear. A quick way to take advantage of these deals is by having a large available balance on a number of credit cards.
Here is what to do:

Apply for and get cards
Always pay on time
Keep balances under 30%
Use all your cards
Call every quarter and ask for increase Also ask for interest rate decrease Apply for more cards
Continue this process

There is no limit to the amount of money available as long as you pay on time and keep using the cards and requesting more.

Have your Credit Cards ready for emergencies and can land some great deals.

#6 Notes A “Note” is an agreement to pay back a loan. Most notes specify:
The amount to be paid back
An interest rate
The interval of and amount of each payment
And by what date loan is to be totally paid off

A note may be used to pay a seller a down payment. Notes may also be used in combination with most all other tactics. Some examples of combinations are:

Note and Owner Financing
Note and Option
Bank Loan and Note
Subject To and Note
Use Your Imagination

Using notes is a great way to buy property without using your money.

Dennis Henson is a full-time real estate investor, author and mentor in Arlington, Texas. He is president of Vanguard Marketing and Investments, Inc. and AREA real estate investors group.  Dennis has a B.S. Degree in education from Jacksonville State University and a Masters Degree in Education from Mississippi State University. He purchased his first investment property in 1971 in Georgia and has taken numerous courses by real estate gurus including John Schaub, Robert Allen, Carleton Sheets, Wade Cook, Russ Whitney, Dolf de Roos, Mike Summey, Roger Dawson, Bill Barnett, and many others. Dennis Henson enjoys investing in real estate, helping people find and purchase a new home, working with new and experienced investors and advanced teaching real estate investing techniques. Many years of experience, constant study, and love for teaching have made Dennis Henson an excellent author and mentor.
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