How To Invest In Real Estate with NO MONEY

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Investor Mel & Dave
Published at : 30 Dec 2020
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Here's a beginner's guide to buying real estate with no money and no credit. In this video, we discuss Owner Financing/Seller Financing/VTB and the secret to buying a property with Other People's Money (OPM).
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Learn more about our mentoring program by booking a call with Mel, Dave or one of our Mentorship Specialists. Join the Action Family and learn all the secrets of real estate investing including how to buy properties with other people's money, how to buy properties with no joint venture partner and other tricks to turn you into a real estate mogul.

The first thing you need to know about Seller Financing is that you can have no money and no credit and this can still work for you! It works by having the seller act as the bank. Instead of making mortgage payments to the bank, you'll be making them to the original owner of the property. For Seller Financing/Owner Financing/VTB to work the original mortgage on the property has to be completely paid off. There are a few ways you can do this using other people's money!

Option 1: First Mortgage. This is where the seller becomes the bank and gives you a first mortgage. Since there can only be one first mortgage, the seller will need to have the building paid off already, or do so when selling it to you. IMPORTANT: MAKE SURE THAT THE SELLER IS OKAY WITH YOU USING CREATIVE FINANCING.

Option 2: Second Mortgage. Another way you can purchase a property using Seller Financing is by using the equity in the property as the down payment for the second mortgage. This is the most likely option for the Seller to choose as they won't have to pay the lion's share of the mortgage. This also means that the first mortgage doesn't have to be completely paid off for this to work! IMPORTANT: Again, inform the first mortgage holder of your intentions and be prepared to be turned down! Some financial institutions or mortgage brokers simply won't allow this.

Option 3: This is the rarest deal of them all! Some might refer to it as the "Unicorn Deal" but in reality, it's called 100% financing and it's as sweet as it sounds! Instead of having to pay off a percentage of the first mortgage the Seller has it completely paid off themselves. IMPORTANT: Lookout for structural, environmental, and lean/legal issues that the seller might be running away from. Make sure to do your due diligence before agreeing on the deal.

Stick around for when we head to the whiteboard and breakdown these deals for you!

Finally, why anyone would want to use Seller Financing. Simply; it benefits the Seller just as much as it benefits yourself! You'll be paying interest to the Seller and if you find the deal off-market, the seller won't have to pay any agent fees! You also won't be disturbing tenants if you go this route! It's truly a win-win situation!
------------------------------------------------------------------------------------------------------- You’re Watching Investor Mel and Dave - where we teach Real Estate investing tips and how to buy your investments with NONE OF YOUR OWN MONEY!

Thanks for stopping by and if you have any investing questions or want me to cover a specific topic, just let us know in the comments section below!
IncomePropertygraham stephan

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