how do you buy appartments with no money down? what strategy is involved? Thanks!

In Buying Property - Asked by JAY B. - Apr 29, 2009
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Answer(s)

Matt D.
Owner/Investor
Franklin, TN

First, you have to know what you are doing and 2nd, there are alot of ways to do it, but the most obvious one is to ask the seller to carry back a 20-30% 2nd mortgage. You get a loan for the other 80% and the bank has to "allow" a 2nd mortgage.
Most sellers are only open to this if they have exhausted all other efforts to sell the property. Hope that helps.

Apr 29, 2009
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Paul S.
Broker/Agent
Glendora, CA

No money down deals usually have something really wrong that make it difficult to sell the property. As a result a seller might be willing to sell without a down. If the seller has a gain on the property it might also be a reason they would take zero down and do an installment sale in which case there may be absolutely nothing wrong with the property at all. In recent years no money down didn't work too well because it would create a huge negative cash flow. With prices falling that is changing. You are going to run into a lot of resistance from an institutional lender that may have a senior loan on the property. Zero down deals on residential is a major factor in the global economy failure. Be very careful what you do. Ask yourself "if I were the seller why would I take zero down"? The answer to that question may be the reason you shouldn't do it.

Apr 29, 2009
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Steve C.
Owner/Investor
Humble, TX

I agree with Matt from TN, you can also get an owner to carry some of the 30% and get a cash investor to put up the rest of the required money in return for ownership and 99% of the tax write off and the cash flow for the first few years. You'd have to put together and LP probably, but it is worth it to own a piece of an apartment complex for no cash but just the know how and the ability of putting all the pieces together. It works for me.

Apr 29, 2009
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george d.
Broker/Agent
Macomb, MI

Is their a good lender that is willing to fund the other 70-80 %

May 3, 2009
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Joe V.
Owner/Investor
Plymouth, MI

Financing. 100% financing is available...and it doesn't have to men there is something wrong with the property. Getting a seller carryback is great, and if teh seller is willing you can also get them to use cash to get better financing on your part.

May 4, 2009
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