Investing in property with no money down.
The above phrase has become very popular over the last decade. You have people like Carleton Sheets claiming that anyone can make lots of money investing in real estate with no money down. You know what? You can do it. The problem is that these deals can be harder to find than most infomercial kings lead you to believe. This is the ultimate leveraged deal when you can find it. I have mentioned before how attractive leverage is to property investors.
Often times the best places to find these no money down or low down payment deals come from owners willing to finance investment property themselves. Owner financing is great for anyone that does not have a lot of money for down payment or less than perfect credit. Usually the owner will be willing to negotiate also.
Sometimes owners of investment real estate decide they want to get out of the business or that they don’t like it after they made the decision to invest in the property.
Sometimes investors want to leave town or they already reside out of town and they don’t want to wait for someone to get financing. By no money down real estate deals, owners can give their hassles to someone else and sit back and collect some money each month.
No money down deals give you a great return on your investment since your investment is minimal. Sometimes the owner will have an assumable mortgage that the beginning investor can take over. Why is this good for an investor? If you are familiar with loans, especially big ones, the first several years you are paying lots of interest and miniscule principal. As the years go on, the more the principal is paid down, so a new property investor could potentially assume a loan and immediately pay down a large amount on the principal, which ultimately allows the investor to pay off the property much faster.
Combine this with increasing your rent amounts by a small amount every year or so and you pay off the loan much, much quicker.
Just think about the amount of money you would be getting each month if you don’t have a mortgage on your properties.
Zero down, low rate loans are being used to sell the McMansions that people can't afford in the first place. The bottom half of the income scale needs sub $100k homes, not loans that they can't repay.
End non safety zoning regs. Let the regular people build homes that they can afford without excessive debt.