How to Buy Real Estate with No Money Down

November 25th 2005

How to buy a Home

Late night TV is full of seminars touting no-money real estate buying systems. Real estate has been booming the past few years and many people have made many millions of dollars investing. So what methods can a person employ to buy property with no money down?

A popular method is to “bird-dog” property. Investors are always looking for deals but don’t have the time to search out every opportunity. Some investors are open to deals found by bird dogging. They may pay you a finder’s fee or cut you in on some of the action.

You may want to begin by signing up for lists of foreclosures. There are some drawbacks to this method of finding undervalued properties. Property owners in foreclosure typically are not that happy. They are swamped with bird-doggers looking to capitalize on their misfortune.

The key is to find the foreclosures before they reach the point of no return. Various state have different laws concerning foreclosure of property. You want to acquire the property before the owner is required to pay for the property in full. Once this happens, the property nearly always goes back to the bank as an REO (real estate owned).

In previous years banks have given deep discounts for REO property. They wanted to unload it as soon as possible. But with values increasing banks have been able to sell properties for more money.

There are other avenues for finding undervalued properties. HUD sells properties they acquire from defaulted FHA loans. My wife and I actually purchased a real fixer upper from HUD. It was a cash deal and required money to fix it up. After two years we sold the property realizing a tax free gain.

You may want to look for previously viewed seminars on tape. This is a great way to learn the real estate business. There are methods of buying real estate with no money down, but you may have to dig.