I want to tell you one of the secrets that creative real estate investors use to negotiate “No Money Down” deals. And it’s really simple but for some reason, often forgotten. Once I learned it, my mind was opened up to so many more deals.
Let’s say you meet with a homeowner that is selling. Your goal is to structure a “No Money Down” deal because you already have a couple renovations in progress and want to keep your cash on reserve. By the end of the negotiation, the homeowner will not sell unless they get $15,000.00 for their equity at closing.
What do you think…is it still possible to get a “No Money Down” deal?
I hope you said, “It depends.” Just because a homeowner wants some money from closing doesn’t mean that there isn’t potential for a “No Money Down” deal. You still have someone that you can negotiate with to make it happen…The Lender!
If the deal is good enough, a hard money lender would give you all the money necessary to purchase, renovate, hold, market, etc. so that you do not have to come out of pocket. Most hard money lenders will do loans from 65 to 70% of ARV.
You could also bring in a private investor to put up the cash for the deal. If you are buying it subject to, you wouldn’t even have to borrow that much money.
Remember, when structuring deals, there are two different parties that you will be negotiating with: the Homeowner and the Lender. Successful negotiation with either of these parties will achieve your goal for a “No Money Down” deal.