No money, no credit, no problem.
In this episode, I'm going to address how to buy a house with no money or credit.
Get ready, because you can create something out of nothing but you can use safe positive
leverage to accumulate wealth and own real estate.
So, my name is Doug Andrew and I've been a financial strategist and a retirement planning
specialist now for more than 47 years and I help a lot of people be able to acquire
real estate to purchase a home without using any of their money or very little of their
money and off times even if they did not have good credit at that time.
Now, let me clarify at the beginning.
When you watch episodes or videos about no money down.
Generally, you're satisfying a downpayment if it's required not with your money.
You can use OPM other people's money or what have you and less the mortgage lender is asking,
"Is this your money, or did you borrow it up from your folks?", you must be truthful.
You must be honest.
But I have acquired many pieces of real estate and I've satisfied down payments but very
rarely do I tie up any of my money.
I like to keep my money liquid and safe.
So, in this episode, I'm gonna give you some ideas on how you can buy a home or real estate
with very little money or no money and with no credit if you have to.
So, let me start out and share that one of the most common ways to be able to buy a house
or real estate with no money out of your pocket, and even if you don't have good credit at
the time is to find a situation like a home seller.
Someone who is in financial distress they have a home, they're behind on the mortgage.
They are looking for a Godsend somebody whos gonna come and take that obligation off their
back.
So, someone in financial distress or a person who has already moved out of the house you
know that they do not need the equity in that home as a big downpayment for the next home
that they're moving into.
Coz they're already in their next home.
Does that make sense?
So, I'm gonna give you some examples of when you find that out about the seller.
What you can do to be able to acquire the house with no money down or no credit.
Oft times I will look at the situation and I told my sons when they were 21 years old
and they were looking for a home to buy I said, "Listen, just go out for a few weekends
and make a list of homes that you like and various neighborhoods.
If you see there's one for sale by the owner take particular note of that.
Also, if they've already moved out of the house and acquire their new house our least
they're not living there anymore.
Make sure you bring back that information and we will contact those sellers.
Because what does it telling you?
Now, either they are in financial distress, or else they don't need the equity out of
that home to get into a new home.
Because they already have moved into their new home.
So, now you can make offers to buy their home subject to or contingent upon", which is synonymous
with subject to.
You're going to make an offer to buy their house subject to them keeping financial employees
the current mortgage in place or contingent upon carrying the contract.
Keeping their mortgage in place until you cash them out or you get financing in even
2 years later.
We have done this many times.
So, the phrase is subject to or contingent upon and usually, I am just working out the
deal directly with the seller.
You don't even necessarily need to close it at a title company.
But I recommend it to make sure that the title passes free and clear of any [inadubible]
when it's time for you to take it over.
So, let me share with you some actual stories and examples to help you get this.
So, if this is intriguing you already be sure to share, post a comment, click like.
But subscribe to this three-dimensional wealth YouTube channel.
Why?
Because I post an in-depth answer to a financial question like this almost daily.
I don't want you to miss out on a lot of the strategies that you can learn.
But stay with me to the end because I wanna gift you a copy of our most recent best-selling
book the lat=ser fund.
This is book number 11 and it's a 300-page book its been flying off our warehouse shelf
and you can go to laserfund.com and contribute a nominal amount towards the shipping and
handling.
I'll cover the rest of that and there's an option there to listen and learn or watch
and learn to empower yourself and you can learn about stories like this that I'm gonna
share right now.
So, let's go to my son Emron, right after he was married I told him to go out and look
for various homes and neighborhoods that are for sale by the owner and the people who had
moved.
He came back after a couple of weekends and he had a whole list of 20 or 30 homes.
We didn't even get to the second home on the list and in about 20 mins we bought a home
with no money and no credit.
How?
In a nutshell, the story is in the book.
But we brought in a couple and they were selling the home.
This was like 20 years ago 2 decades ago and it was a nice 3 bedroom home and I think they
were selling it for about 170,000 which would be more than double or triple that now.
But they had an offer for 160-162 and I told my son and go in and offer 2,000 more than
their asking price.
Why?
It was in a hot market back then because I wanted their attention and sure enough, we
got their attention.
They came to us and met and we simply asked them a few questions.
"So, would you mind telling us how much you owe on this house on your mortgage?", And
they owed like a 130,000 or something like that, "And so you have about 40,000 of equity
in the property and you're already in your new house so you don't need that 40,000 of
equity, correct?", "Well, no we want it but we don't need it to get into our new home".
"So, what is that [inaudible] to sell this house?", "Well, we wanted to suck away that
40,000 for our 2 children's college education."
"Oh great, how old are they?", and I think they were 11 and 13 years old and I go, "Okay,
where are you gonna put that money?", they say, "I guess in a bank or something", I said,
"Banks?
One percent?", and I calculated how pathetic that would be.
40,000 would barely grow 10, 15,000 by the time they went to college.
I sai how would you like to earn more like 7 and a half percent interest on that 40,000.
This means in 10 years that 40,000 went double to 80,000.
"Well, yeah.
Where can you earn that?", "Well, basically, with the equity in your home you're simply
leaving that there.
You are carrying a second on the house.
My son will make a monthly payment to you to cover your current mortgage payment.
So you don't have to worry about that and the 40,00 will crow at 7 and a half percent
interest and he has the right to pay you off in 2 years, 3 years, 4 years.
When he can refinance property because it's going up in value", and I calculated when
that would grow to their children's college education and they say, 'So, what's back in
us?".
I said, "An asset you're very familiar with your house.
Do you think your house is gonna go up on value?", "Yes", "There you go, you will actually
then have a second trusted on this.
That you get the house if my son defaults."
They said, "Oh, this is a great deal", and we walked out 20 mins later buying that house
with no money, no credit check, and about 2 years later that house went up on value.
He refinanced 80% loan value.
He refinanced an 80% loan of value to pay them off.
They didn't want to be paid off.
They wanted to live the money in their being credited 7 and a half percent.
So, my son showed them to earn 7 and a half percent by using my favorite vehicle the laser
fund and they're still were able to achieve their goals for their 2 children.
Does that make sense?
The key is to be able to have a conversation with the seller.
The very first home that I purchased back in 1974.
I simply invested about $3,000 into fixing up the house and then I was able to buy the
house into the praise for enough to cover the down payment back on that very first home.
The next one I acquire property.
Once you have the property I told the person who sold me the lot, "Hey, if you'll subordinate
I'm gonna go use that as a downpayment", coz oftentimes when you go to qualify for construction
or a mortgage.
They will allow at least 20% to be the value of the land and I've done that several times.
I did that on a home that is a 64 foot home where I bought the acre lot for $75 a month
and then I told the seller of the lot, "If you'll subordinate I'm gonna use this lot
as a down payment to build the home and one I build the home then I'll be able to refinance
it and I'll pay you off."
We did that it was a win-win.
Because I was able to go in and get a complete mortgage by having the person who sold me
the lot subordinate and give me a free and clear deed to the land to use as a down payment
and then I agreed to pay them with interest when I refinance the property.
I could have bought a $750,000 home one time in less than 5 mins.
When again it was free and clear and they're already in their new home.
Coz they had it inherited several million dollars.
"So, what are you gonna do with this 750,000?"
"Well, I don't know we don't need it for our new house."
I said, "Would you like to earn about 7% interest on that 750,000 secured by an asset you're
very familiar with", they go, "What's that?", I said, "Your house", "You know let's just
bypass the minimum and you just take over as the mortgage lender", and they go, "That's
an excellent idea.
Can you move in next week?", no, we decided we didn't move.
I could have bought a 750,000 home and this was again about 15,20 years ago.
That would be a million, 2 million, 3 million today.
I could have bought it in less than 5 minutes with no money down no credit.
There are several ways that you can do this and you get creative or of times you can lease
or rent a property with the option to buy.
Which I've done many times and as I rent a property I have the option to buy it then
owing to the mortgage balance on the property.
Especially if the seller is in financial distress and the house is not worth more than what
they owe.
There's a lot of times where people are upside down in their house and they owe as much as
the house is worth.
Those are golden opportunities to walk in, lease it, rent it, with an option to buy,
and when you buy it for them then you owe a mortgage balance 2 or 3 years down the road.
When it appraises to 20% more.
When the market rebounce and now you can go in and purchase the home for 80% loan to value
and the down payment has actually been crowing with you making rent or lease payments.
Instead of just going down the drain because you're sort of paying the downpayment or building
it up and using the increase in the home's value for 2 or 3 years to et ti with no money
down.
So, folks, I could give you many other stories sometimes I have found with the seller or
by the contractor by simply taking over their existing mortgage or having it subject to
or contingent upon.
Them continuing to carry the contract until I refinanced 2 or 3 or 4 years down the road.
But remember this, it doesn't mean you don't have money.
It means you're not tying up your money in an unnecessary down payment out of your pocket.
You are using creative ways to satisfy the downpayment or to be able to build up the
money as you lease or rent with an option to buy.
There's all kinds of ways to do this.
So, folks, if this is intriguing you and you want to know how to accumulate your money
on a tax favor basis and be able to access it like many real estate investors do.
They use my favorite vehicle it's called the laser fund and so I'll gift you a copy of
this 300 pages book.
If you go to laserfund.com click below and you contribute a nominal amount towards the
shipping and handling and I'll fire out a copy of the book for you and then you can
begin to learn how to keep your serious cash liquid, safe or unpredictable rates of returns
and then you can use leverage safely with liquidity.
Leverage without liquidity is stupidity.
So, do it smart acquire real estate and you'll be able to take yourself on the road to becoming
a financially independent multimillionaire like many people have by using OPM, other
people's money, and making it a win-win.
A win for you and a win for the seller.
That always turns out best.