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Fact or Fiction : No Money Down Zero Down Real Estate Investing

Written by on 05/30/2008 · 9 Comments

No Money Down Zero Down Real Estate InvestingHave you ever seen the movie “Boiler Room?” If not, check it out! One of the best scenes involves Ben Affleck doing a group interview. He works for a less than reputable brokerage firm and tells a fresh batch of recruits like it is. One of the first questions Affleck asks is whether anyone had already taken the Series 7 Exam. When one of the guys pompously raises his hand, Affleck shows him the door saying, “We don’t train old brokers here, we hire new ones!”

When I got started as a real estate investor, I had zero experience in the real estate field. None of my immediate family had ever been an agent. No mortgage brokers, appraisers, or real estate attorneys. I was quite green and had a fresh mind ready to soak up whatever was put in front in me. Having no background, when I first came across the idea of “Zero Down Real Estate Investing,” it was hard to comprehend, but I did not have any preconceived notions to hold my thinking back. I was like the newbie in “Boiler Room.” It is often times easier to learn a new concept when you don’t have to unlearn ingrained ways of thinking and doing.

If you look around at a book store or if you google, “No Money Down Creative Real Estate Investing,” you’ll see an array of information on the subject. I still hear plenty of people refute the claims saying that it doesn’t exist and can’t happen. Anytime I hear something like that I simply say to myself, “Well, they’re right, it doesn’t exist and can’t happen for them.”

Most of the time, the people that don’t believe in the “No Money Down” claims are the ones that have been trained in real estate the traditional way. And I can’t blame them. Had I learned the way that they did, I may have the same mental blocks that they have.

One of my next posts will explain several different ways to structure a “No Money Down” deal. But before I go, think on this one. Just because someone says that they have bought property with no money down, doesn’t mean that there weren’t funds required to close the deal.

Often times, “No Money Down” just means no money out of your pocket.

Two of the most famous gurus on the subject are Robert Allen and Carleton Sheets. I will go into more detail on books, courses, and seminars soon.

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Categories: Real Estate Investment Financing Strategies

  • http://www.nlightenllc.com Randy Adkins

    I Believe…and I am a real estate agent. I am currently doing no money down deals and this is real. As I speak to potential investors this is their number one excuse for not investing. They say well I don’t have any money to start investing, then I casually say you do not need any money if you want to invest bad enough. I guess maybe they lack the passion to take ACTION. Thanks for the post and the coaching!!

    Randy Adkins
    http://www.nlightenllc.com

  • Patrick Riddle

    The “I don’t have any money to start investing” excuse is quite common. It gives people an easy out so they can justify their lack of action and passion.

    It’s great to hear from someone trained as an agent and still open to creative real estate investing techniques. You’re positioned to do quite well.

  • http://carolinakey.com Fred Jackson

    The NO MONEY DOWN technique hasn’t been explained in detail enough by the gurus. Sure you can do no money deals, but they are a lot riskier for new comers. Finding a no money down deal is one thing, but once you have it, there are costs involved in securing, maintaining, holding, repairing, and selling that property to realize the profit. Those costs can easily and rapidly eat into a novices’ confidence and bank account.

    As investors, I believe we should be upfront with would be new comers to this technique.

  • Patrick Riddle

    I couldn’t agree with you more. In my follow up post to this, I will be covering some of the intelligent concerns you have brought up!

    Thanks!

  • Dusty Keefe

    Any real estate transactions by someone who is not trained or trained very little (newbies) is going to be a risky proposition. Yes, there will be costs and risks associated with holding a property. However, I believe that a “no money down” deal is less risky than a newbie putting down $10-20K upfront to do a deal that they might lose. It is important to get the right training and put the right systems in place from the very beginning.

  • http://www.collegeplanningu.com ATurner

    Interesting…actually I teach mathematics to kids and it is the same way with them. Nearly always it is easier to teach a concept as brand new to a student rather than try to retrain a student who keeps on putting negative signs in wrong places, doesn’t punctuate statements properly, and will literally tell me, “I am just not good at math.” (Continuously programming his or her own mind with failure). Right on!

  • http://carolinakey.com Fred Jackson

    I agree, Dusty. Training is vital to becoming a successful investor. The NO MONEY DOWN technique, i believe, should be the last to be taught. Purchasing a sub2 or over leveraging (100% financing) a property when you’re just getting started is a killer is it doesn’t pan out. Especially in this market with an abundance of deals with no equity.

  • Patrick Riddle

    Just because a deal can be structured as No Money Down, doesn’t make it a deal worth doing. That should be taught to newcomers in conjunction with the techniques and strategies.

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