Purchasing Property With No Money Down My Personal Experience

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Have you ever seen those infomercials regarding buying houses with No Money Down? They are if truth be told well done. They have all kinds of people donating great testimonials with reference how they have gotten rich, buying rental properties, with completely no money out of their pocket. You see this guy, standing on a street corner, chatting to someone, and he says, I own that one, pointing to a beautiful colonial. I also own that one next to it, and the one two doors down, and Ill be closing on the one directly across the street from it, next week. He then assures us that he has acquire 17 homes in the last eight or ten months, with zero money down on the home. Plus, in many cases he in addition paid no closing costs
And, let’s not overlook, this same guy is grossing tens of thousands of dollars monthly, and his net worth is nearly one million dollars. So, he says.

Now, all of this looks astonishing, so when the person selling the classes that will teach you how to do this, at an effective price of just $297.00, speaks, you are glued to his every word. Real estate is the safest and fastest way to make money, today, the expert will tell you.

Therefore, can this really be done? Can you get houses with no money down? Can you become a landlord in as little as one month’s time and start gathering in the cash from those rent payments? The answer is an absolute Yes. It can be done, and I am proof positive, because I’ve done it. The question you supposed to be asking yourself is not can I buy real estate with no money down, but should I? Hardly ever is the whole truth anywhere to be found in infomercials, particularly when the advertising is about No Money Down real estate programs. The infomercial makes the inspiration and the program seem so easy that any child might handle it. It makes it appear like every American ought to be doing it, and we all would be millionaires. However every American is not doing it, and many of the ones who are doing it not only are not getting rich, they are actually going broke. The infomercial won’t tell you this. That why I am here.

The Truth

Hardly ever is the whole truth anywhere to be found in infomercials, particularly when the advertising is about No Money Down real estate programs. The infomercial makes the inspiration and the program seem so easy that any child might handle it. It makes it appear like every American ought to be doing it, and we all would be millionaires. However every American is not doing it, and many of the ones who are doing it not only are not getting rich, they are actually going broke. The infomercial won’t tell you this. That why I am here.
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In two years, she would clean up her credit, refinance the loan on the house, and I would make $10,000. Sounded good to someone who was quick to buy into anything that returned big dollars in a short time.

This worked for the first year, as the woman paid on time, and I pocketed an extra $100 monthly. Later, though, things began to collapse, as the house began to need repairs, all of which the woman couldnt afford, so I had to pay for them. I put nearly $5,000 into the house in a four-year period. When I was finally able to sell it, I didnt quite make back what I had put into it.

Meanwhile, I was eager to overcome this problem by adding many more. A slick mortgage broker got hooked up with an even slicker real estate prospector, and the two of them convinced me that they had a way I could buy houses rapidly, with absolutely no money out of my pocket. Although my experience will probably be enough to enlighten you to the pitfalls of this model and of being a landlord, let me say that I cant emphasize enough how dangerous buying property with no money down is.

In six months time, I had purchased eight houses many with loans from the same wholesale lender. These lenders should have been concerned with all of the debt I was building, but they kept approving loans, based on my good credit and rents covering the mortgage payments. One of the biggest problems, which I was not experienced enough to detect, was that most of the rents were just $50 to $100 above the mortgage payment.
Dont worry, the investor/ hustler would say. Youll make all your money on volume. Well get you into 30 or 40 houses, and youll be pocketing $4,000 to $5,000 every month.
As you might imagine, my mind raced. I was making the huge deposits at that very moment. My bank account was fattening up at breakneck speed.

The Illusion

This is what people who buy houses, using the No Money Down plan envision happening. After all, if you can buy one house with no money down, why not five or ten or fifty? For some reason the vision of the dollar sign, most likely I failed to seriously consider the maintenance of these houses, the possibility of missed rent payments, and the chance that renters might actually stop paying, altogether, forcing me to evict them a time-consuming and extremely costly undertaking.

As you may have already guessed, all of these things happened to me, after I had amassed 26 rental properties. In fact, oftentimes, all of these problems happened in the same month. Now, for awhile (when I had about 10 houses), if one person failed to pay rent, I could cover it with the nine other payments. But when two, three and sometimes even five tenants didnt pay in the same month, it was devastating to my business. I had to go to my business account and pay up to $3,000 at a time in mortgage payments, with no income to cover it. Plus, I had to pay a property management company to get my tenants to pay or to evict them.
Soon, this became the norm, not the exception. There were constant problems at my houses. Unhappy tenants led to poor upkeep of the property and even more maintenance problems. About one year, after I had amassed 26 houses, I was having problems with roughly 10-15 houses and/or tenants each week. I was evicting at least two tenants each month, and approximately four to seven tenants were either behind on rent or not paying at all. Promises were made, payment plans arranged and few, if any, ever followed through.
It didnt take long for me to realize that this was no way to make money in real estate. Consequently, I got rid of these houses as fast as I possibly could. There were plenty of buyers, willing to take over my headaches, because they had the ability to make it work, they believed.

In 10 years of being a landlord, I lost thousands of dollars and likely took some years away from my life with all the stress I had endured. So, whatever you do, avoid the No Money Down Trap. There are much better, still inexpensive ways to make money in real estate.

Learn the best ways at www.winningthemortgagegame.com