Buy a house w/no money?

[beer_dude]

Any real estate investors out there? I am considering buying a rental property with no mony down. Has anyone done it before? Any experiences to share?

[Nerak936]

Don't know about buying with no money down (I inherited mine), but I can tell you that being a landlord is a fun and exciting part of my life. Doesn't take any effort at all. I just sit back and let the $$$$ roll in!!!


!!!!

[beer_dude]

Originally Posted by Nerak936

Don't know about buying with no money down (I inherited mine), but I can tell you that being a landlord is a fun and exciting part of my life. Doesn't take any effort at all. I just sit back and let the $$$$ roll in!!!


!!!!

I have two rental properties already and I don't know about fun and exciting. I am barely covering the mortgage's but the tax writeoffs are nice and the equity buildup will make retirement easier. Maintenance and turning over the properties when a renter moves out are a lot of work. I have found that you really have to screen your prospective renters thoroughly before you let them move in.

[solcats3]

Beer Dude, I suspect Nerak was pulling your leg a bit. She has often written about how much she LOVES getting up at the crack of dawn to shovel snow off of walkways, etc. so that a tenant doesn't fall, break a bone or two and sue her.

[Nerak936]

Originally Posted by beer_dude

I have two rental properties already and I don't know about fun and exciting. I am barely covering the mortgage's but the tax writeoffs are nice and the equity buildup will make retirement easier. Maintenance and turning over the properties when a renter moves out are a lot of work. I have found that you really have to screen your prospective renters thoroughly before you let them move in.

That is THE most important thing you can do.... but you just don't REALLY know what they'll be like until they move in. What looks good on paper can make for a lousy tenant. I've had "good on paper" tenants who were absolute pigs, and it took me forever to clean the apartment after they moved out - even just to get it to the point of being able to show it to prospective new tenants.

Good luck, BD!!

[Nerak936]

Originally Posted by solcats3

Beer Dude, I suspect Nerak was pulling your leg a bit. She has often written about how much she LOVES getting up at the crack of dawn to shovel snow off of walkways, etc. so that a tenant doesn't fall, break a bone or two and sue her.

Thanks, solcats..... I was hoping all those winking smileys at the bottom of my initial post would get my tongue-in-check point across. Yeah.... "fun and exciting" it sure ain't!!

[James A.]

Your cash-flow analysis on the property should give you a pretty good idea if it's a good deal or not, (completely discounting the pain-in-the-ass tenants factor.)

"No money down" and a good rental are not mutually exclusive, I would think. But who knows...not me.

[beer_dude]

Well...after talking with the mortgage company, it looks nearly impossible to buy a house with no money down. At minimum you need 10% to get the PITI affordable. Bummer! I was hoping I could pull this off. I always wondered how the "Seminar" guys could do it? If it sounds too good to be true...yada yada yada!!!

[myhappyplace2]

As an ex-mortgage broker, the best way to buy a property with no money down is to find an undervalued property. ie. foreclosure, tax sale, estate sale. Then take out a mortgage based upon the equity value in the property. Most lenders will only lend based on 75 % LTV on investor property. also on investment property you will still have to pay all the lender fees and ususally the rates are about 1/2 to 1% higher than owner occcupied loans. Good luck. There are deals out there but many people are looking to cash in on them.

[Michele]

Originally Posted by beer_dude

Any real estate investors out there? I am considering buying a rental property with no mony down. Has anyone done it before? Any experiences to share?

Yes. Lots of times. If you are down here my husband will walk you through the options if you buy the beer. You don't need a seminar. You just need to readjust your comfort zone.

[Seakony]

Every time I get a contract on the house, the buyers always want me to pay 5000 or more for their closing costs...hell, What are they paying? Hated having renters...never paid their rent and left a mess. You will get so tired of their excuses.

[Sourcerer]

Here is a story about a guy who is trying to get a house in exchange for one red paperclip. One Red Paperclip

So far he has successfully trade up for a pen, a doorknob, a coleman stove, a generator, a keg o budweiser + neon sign, a snow mobile, a ski trip to BC, a 1995 Ford cargo van, a studio recording session, and one year free rent in Phoenix.

Why don't you try this?

[beer_dude]

That would drive my tax guy crazy! How are we going to depreciate this?

[jamesblonde]

I have three seperate rental properties that I have zero money into. The rent on each covers my payments. The way we did it was going to the auction on the courthouse steps. You have to pay cash at the auctions, but we just secured a line of credit for that. Then after purchasing, we refinance. Values here have increased 20 to 30% per year over the last couple of years, so it is a bit harder to find these foreclosures, but it is still possible. We just sold one for a 65% profit in 30 months. Hoping to get something in Playa instead.

[beer_dude]

Originally Posted by jamesblonde

I have three seperate rental properties that I have zero money into. The rent on each covers my payments. The way we did it was going to the auction on the courthouse steps. You have to pay cash at the auctions, but we just secured a line of credit for that. Then after purchasing, we refinance. Values here have increased 20 to 30% per year over the last couple of years, so it is a bit harder to find these foreclosures, but it is still possible. We just sold one for a 65% profit in 30 months. Hoping to get something in Playa instead.

Did you have your line of credit before the auction? Was it secured by your existing properties?

The housing market in Denver is really cooling off. The bubble has burst so to speak. You can find pretty good deals in repos/forclosures but with interest rates and all, it's hard to rent them out for enough to cover the mortgage.