If I told you that you could own a home without putting a penny towards a down
payment, you’d probably think I was crazy. Everyone knows that to purchase an
investment property you need at least 20% for a down payment, right?
Buying a house with zero down is completely possible. And I’m here to show you how.
Why Do People Think It’s Impossible?
Let’s kick things off by going over why people think it’s impossible to buy a home for zero
down in the first place:
Your Banker and/or Realtor Tells You It’s Impossible
People think it’s impossible to buy with no money down because they hear it straight
from their banker or realtor. But remember – even if your banker or realtor owns property
of their own, they’re not in the business of real estate investment.
There’s Not Too Much Information About It
People think that if there’s not a ton of information out there on how to do it, it must be
They Don’t Have Great Credit
You’d be surprised by the credit you need to purchase a home with zero down. Because
you’re going after commercial loans, it’s a different ballgame, and the banks can be a lot
more flexible. If your credit is good enough to rent an apartment, it’s probably good
enough for this.
What Will Happen If You Do This Right?
99% of people believe that it’s impossible to buy a house with zero down. But now that
you know it’s possible, you’re already at a huge advantage. And if you do it RIGHT, you
can get infinite returns. When you’re at out-of-pocket zero, everything that you take in is
a return. You can start building equity. It’s a fast track to financial freedom.
And once you have three or four properties, the bankers start looking at you differently.
All of a sudden, they’re taking you out to dinner. People start asking your opinion on
investments. It puts you into a new position of power.
And that helps you in your relationships with your contractors. They see that you’ve got
momentum and that you’re someone worth building a long-term relationship with, which
can lead to better deals on the work they do for you.
It also puts you in the position to get more referrals. In other words, it enables you to
stop looking for business and have business come to you. Recently, I had someone
refer me a piece of land that I bought for $120,000, and then immediately sold for
$150,000. So that was $30,000 that came to me – no work necessary.
How Do You Buy Your First Zero Down Home?
Now here’s the important part: exactly HOW do you buy your first zero down home?
First, you find an off-market deal that needs some work. We send out letters to
prospects every month to find new properties.
So you find a bad house that needs some work. Then you buy it for $60,000 with hard
money (if you’re not familiar with hard money, we’ll talk about it a little more later, but it’s
basically a high interest loan, around 12%, that you borrow from an individual lender or
specialized bank). Then, you put $20,000 of work into it, and now it’s worth $130,000.
The bank will lend you $100,000, meaning that your income ($100,000) is higher than
your expenses ($80,000), which means you actually made money on buying a property.
Now, I know this seems too good to be true. But I promise you, this is really possible.
And I know because I’ve done it, many times over. Here’s a photo of an HUD on a
recent duplex I purchased that shows my out-of-pocket costs. As you can see, I spent
$422 on this property. And the only reason I spent that much was that I messed up on
the numbers and didn’t borrow enough.
If I can do it, so can you. Purchasing a zero down property can be a true fast track to