What Is Nothing Down Investing?
Nothing down investing is when you acquire a property without using any of your own money. It does not mean that nothing is put down to acquire the property, it just means none of your own money is used in the transaction.
Notice, I said acquire and not purchase. That’s because some of the strategies don’t result in an actual purchase and sale.
Personally, I don’t like using my own money. So these are going to be very creative ways that I’m going to talk about.
The first way is what I call seller financing.
This is where you get the seller to actually finance the purchase of your property for you. And there are different ways to do that.
A seller could either hold back a mortgage for you, a partial mortgage or the full mortgage of the value of the property.
Another way is the seller could sell the property to you using what’s called a subject-to where they actually sign over the property to you where they still stay on the mortgage but you are on the title … you are the actual owner.
You actually make payments to the bank.
This is not illegal, but the banks frown on it.
There is what is called a due-on-sale clause in the mortgages. Usually when you sell the mortgages are due in full and you have to pay the bank. Usually banks don’t complain if you continue to make the payments.
Another nothing down strategy is using a joint venture partner.
A joint venture buyer venture partner is somebody that’s all in on the deal with you.
You go out, you find deals, and you find money partners or joint venture partners to come in and help finance the deal. They’ll finance the purchase. They’ll finance the renovations. They become a partner in your deal.
The nice thing about using a joint-venture partner is that if your deal doesn’t make a lot of money for whatever reason, they’re going to be exposed to that same risk factor and that same result of whatever investment that you did.
