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By Dennis Henson

Zero Down Purchases
Is it possible to buy property for no money down? Of course–there many ways to
totally finance the purchase of real estate. It just takes some imagination and some OPK
(Other Peoples Knowledge). Here are twelve great ways to buy property using very little
or none of your own money…

#1 Owner Financing
A fast and easy way to acquire financing is by persuading the seller to finance the
purchase. Look at all these benefits:
• No Credit Check
• No Loan Apps
• No Banks
• No Waiting
• No Closing Costs
• No Stress
• Better Interest Rate
• None of Your Own Money

The only problem with this technique is that it’s sometimes harder to achieve than
conventional methods. But it can be done if you find a truly motivated seller.

#2 Partners
Another great way to purchase with none of your own money is by using partners. This
too has many benefits.
• No Credit Check
• No Loan Apps
• Less Waiting
• None of Your Money
• Better Rates
• Easier to Find

But this tactic has a few more drawbacks–such as:

• Some Paperwork
• Banks Maybe
• Some Closing Costs
• Stress
• Less Profit for Yourself

How would a partnership work? You have to make a plan that will be good for you and
attractive to someone with money. One way could be you do all the work, and your
partner provides all the money. Now you only have to decide how you will divide any
profits the property produces.

Who might be prospective partners?
• Anyone with money
• Professionals–Doctor Dentist Accountant
• Friends
• Neighbors
• Co-workers
• Church
• Club Members
What would attract a partner?
• Good deals
• Tax breaks
• Profits
• Prestige

Just be sure to get everything in writing before you start the deal. And please consult a
real estate attorney to help organize the partnership structure and the partnership

#3 Investors
Using investors is also a great way to finance your real estate deals. You just pay them
for the use of their money, and you get to keep more of the profit than with a partner.
What will attract investors to your deals?

• Security
• A good return on their investment
• Liquidity

What are some ways to find investors?
• Attend Financial Planning Meetings
• Pass out your business card
• Go to investment clubs meetings
• Talk to everyone you meet about investing
• Search the web
• Do a web site
• Use the Internet and be creative
• Before running ads, check salutation laws

An investor ad might read…

Potential Earnings of 7%-9%
Secured by Real Estate, Short term 3-12 months
Call for Details 817-371-8658 or go to
Again be sure to get everything in writing and give risk disclosures before taking money
from an investor and consult a real estate attorney to help with the paperwork.

#4 Subject To
What is a “Subject To”? A “Subject To” means that you purchase a property–leave the
existing financing in place. The purchase contract would specify that you are buying the
property “Subject To,” the current first and or second mortgage.
Is this legal? My attorney says yes, but check with your attorney.
Is it wise? That depends on how sure you are that you pay that mortgage payment on
time every time. As long as you pay on time, everything should go smoothly. But BIG
trouble could begin if you miss a payment. So–if you don’t like court dates, judges, and
possibly jail cells–proceed carefully.
Here are a few of the benefits of the “Subject To” tactic.

• No Credit Check
• No Loan Apps
• No Waiting
• No Closing Costs
• None of Your Own Money


• A Bank is involved
• There can be stress
• Proceed very carefully

#5 100% Loans
Are 100% investor loans available? Yes–but they are expensive and not too easy to
obtain. Even with these drawbacks, 100% loans are frequently used by established
investors to buy property.
All You Need is:

• Excellent credit
• A few profitable years as a successful investor behind you
• A good friend for a mortgage broker

#6 Hard Money
What is “Hard Money”?
A rough definition might read:
A no red tape Real Estate and Construction loan where the property is used to
guarantee repayment. In a default “, Hard Honey” is repaid by the borrower with
the collateralized property.

My definition is a little more easily understood. “Hard Money” equals HARD TERMS.
Hard money loans commonly have:
• High origination fees (Points)
• High interest
• High Early payment penalties
• Low LTV limits (Loan to Value)
• Short terms
• High fees to renew
• Specific areas

Hard money lenders are not usually concerned with you are the condition of your credit.

They are concerned primarily with the value of the property. If you default on the loan–
they may recover their investment and much more.

Even though this may seem rough–“Hard Money” lenders can be a good money source
of capital –IF you need the money quickly and your deal will support the costs.

Some advantages that these lenders may offer include:
• No credit check
• Quick closings
• Interest only payments
• Funding for repairs
• None of your money

One “Hard Money” lender offered the following terms on the date of this writing:
• Loan amounts from $50,000 to $2,000,000
• Rates from 12.99%
• Term from 6 to 24 months
• Acquisition, Rehab/Repositioning, Cash Out
• LTV–up to 70% of after repaired value
• Points–from 3%
• Use the equity in other properties as a down payment
• Quick Closings–within 2 weeks from receipt of a file
• Lending area–Texas metropolitan areas, Colorado…
• Amortization-interest only
• Not credit driven

#7 Buy and Sell a Contract
This tactic takes a little more ingenuity than any of the others to this point. You will need
to be sharp enough to tie-up Property with just a note. This will give you some time to
find and sell that contract to another investor or buyer. At the closing, the title company
will treat you as a flaw in the title that must be fixed (paid) to complete the transaction.

#8 Auctions
Find a motivated seller and tie up the deal with a “Note”. Then proceed to sell that
property through a real estate auction. If the value is good enough–you can earn some
serious money in a short time with this tactic.
Some property auctions such as “HUD” (Housing and Urban Development) will allow
you to tie up the property you have won at auction for a small deposit. You may need to
use one of the next tactics to get that money. After you have the property tied up, you can
sell your interest to another investor or buyer.

#9 Credit Cards
Another great way to avoid using your own money for buying property is by using Credit
Cards. You never know when a great deal will pop up, and take my word, great deals
must be grabbed quickly, or they will disappear. A quick way to take advantage of these
deals is by having a large available balance on several credit cards.
Here is what to do…
• Apply for and get cards
• Always pay on time
• Keep balances under 30%
• Use all your cards
• Call every quarter and ask for an increase
• Also ask for an interest rate decrease
• Apply for more cards
• Continue this process
There is no limit to the amount of money available as long as you pay on time and keep
using the cards and requesting more.
Have your Credit Cards ready for emergencies and can land some great deals.

#10 Sandwich Lease Options
Are Lease Options Legal? Yes, they are, but some states have guidelines. Just be sure to
check with your Real Estate Attorney before you get started.
What is a “Sandwich Lease Option”?

Let’s take this step by step–an “Option” is the right to do something. You may purchase
the right to buy a specific property before a specified date. For example, I may give you
$1,000.00 for the option to buy one acre of land for $20,000.00 before the end of this
month. I do not have to buy the property–and if I don’t, you get to keep the $1,000.00
and the property. You “do” have to sell the property to me for $20,000.00 if I choose to
exercise my option.

A “Lease” is when you agree to make payments to use something for a period of time. I
might lease your car for three months for $400.00 per month. At the end of the 3 months,
you get your car back, and I start walking again.

A “Sandwich” is two pieces of bread with a piece of ham between each slice. Well, that’s
a “Ham Sandwich”. A “Sandwich Lease Option” is when I pay you for the option to
purchase a piece of property and sign a lease to use that property during the time of the
option. If I then sell my option to someone else and sublease it to them–that is a
“Sandwich Lease Option”. I’m sandwiched between you–the seller and my buyer.

By setting up this technique in advance, you have another great way to control a property
without using any of your own money.

A HELOC is a Home Equity Line of Credit. Many banks offer their customers the
opportunity to take out a second loan on their dwelling. This is providing they qualify for
a loan and that the home has sufficient equity to support the loan.
Here is the nothing down tactic.
• Buy a home well below market
• Move-in
• Get a HELOC based on the market value
• Real Example

$158,000 Purchase Price
7,000 Down (use your credit card)
230,000 Appraised Value
32,000 HELOC
25,000 Net

Not only did you not need your own money, but you added $25,000.00 to your cash flow.

#12 Notes
A “Note” is an agreement to pay back a loan. Most notes specify:
• The amount to be paid back
• An interest rate
• The interval of and amount of each payment
• And by what date loan is to be totally paid off

A note may be used to pay a seller a down payment. Notes may also be used in
combinations with most all other tactics. Some examples of combinations are:
• Note and Owner Financing
• Note and Option
• Bank Loan and Note
• Subject To and Note
• Use Your Imagination

Using notes is a great way to buy property without using your money.

A Dozen Ways to Buy Real Estate With Very Little or None of Your Own Money
1. Owner Financing
2. Partnerships
3. Investor Loans
4. Subject To
5. 100% Mortgage Financing
6. Hard Money Loans
7. Buy and Sell a Contract
8. Auctions
9. Credit Cards
10. Sandwich Lease Options
12. Notes & Combinations
Continuing Education
Listen to recordings while driving & read:
• “All the Money You Will Ever Need” by Dennis Henson
• “Nothing Down” by Robert Allen
• “No Money Down” by Carlton Sheets
• “Are You Dumb Enough to be Rich?” by William Barnett
Find all these and more at…

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