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Real Estate Investing - Where To Find The Money?

The big question is always how can I buy property when I don't have a down payment?

There is many different answers to this. Owner financing, JV partnerships, conventional mortgage with a VTB, credit cards, options, rent to own.

Owner Financing

This is when you buy a property that the owner will help you finance. You are dealing with owners that are either motivated or flexible. I once bought a property with 100% owner financing. This is rare, but does happen. In most cases you will get a mortgage and the owner will carry a second mortgage, this is called a VTB vendor take back mortgage. Now you pay the bank and the vendor each month, unless other arrangements have been made. For example the owner agrees to accept payments 1-2-4 times per year instead of each month. It is all about writing what you want in the contract and having the vendor agree to the terms. You can also do interest only payments and have a balloon payment at the end of the term. The purpose for you to do this is now you might have a positive cash flow property instead of a negative one. And by the time you have to make the balloon payment you have increased your rents enough to have saved for this.

Joint Venture Partnerships

Called JV's. This is an excellent way to build your portfolio. Simply find a property, make sure it fits the buying criteria you have set out for your personal goals, then find someone to put up the down payment and get the mortgage. Many times people want to get into real estate investing and do not have the time to learn the strategies involved or have the time to find and handle the deals. It is still good for them to just put up the money and credit to invest in a rental property. Compare this to if they invest in stocks. They buy some shares, the market moves 5%, they make 5%. With real estate they JV with you, the market moves 5%, and because of leverage he/she makes 15%, and you make infinite since you put up no money. Really though you do have a ROI yourself, just have to figure out your wages.

Kelly Kramer owns a plumbing company and buy and sells real estate, if you liked this article you can learn more at

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Updated Mom ;) said...

Hi Wan

great post - I find most of your articles very useful for my financial needs ;)

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