For years we hear the ads on radio and TV… “No money down, no money down”. Sounds like snake oil … yet I keep hearing that you can still buy real estate with no money down. Truth or fiction?
Well, there are ways to buy with “no money down”, some are easy and obvious, others need some work – all need thinking out of the box.
As a residential home buyer for your own use you can buy with 5% down (with CMHC insurance)… It is just a question of finding that extra 5% – there are Dad, Mum, grandparents for that…
(Buy a condo in Newton for $95,000 … pay $4,500 down and monthly payment is $425. Cheaper than rent.)
For investors 20% must be found as Financial Institutions will only lend 80%. Here are a few ways to accomplish it:
Get an owner to carry back a vendor take back mortgage (if you have good credit – or they know you and don’t need all the cash).
Rent to own/Lease to own. Borrow the funds from a secured Line of Credit (LOC). Most popular and easiest way to do a ‘no money down’ deal. One can borrow all of the funds from the LOC.
Borrow funds from an unsecured LOC. Some banks aren’t too keen on this but it is doable, even with 5% down for clients with good credit.
Joint Ventures: Half a pie is better than no pie. Create a Joint Venture Partnership. There are a lot of people with money that would love to earn more than 2% in the bank. If you can find a good deal … you manage it, you work it, you may find someone coming in for half and bringing the money. The guy with money has no time, the person with time has no money – they can do it together – successfully.
MOST IMPORTANT: The absolute key in all of this … is the good deal. That is the hard one!!! If you don’t have a deal, you will find no money. If you have a fine deal, money will find you.