A Note About "No Money Down"

We really do not want to mislead anyone. Many other "gurus" will tell you that can buy all kinds of real estate for no money down, and that you can own all kinds of income properties without having to put up any money.

Well, to a degree that is all true. But it's what they are not telling you that can hurt you! And what we are about to tell you (the truth) may not be what you want to hear - but hear it you must.

There are two major methods of investing - buy and hold (income properties) and "flipping" (buy and resell, either immediately or after fixing). When you flip, buying with no money down is the best way to go - it preserves your cash for other things, and since you will be reselling, it does not matter if the mortgage payment is going to be a little higher. And, if you are flipping by using the double escrow, or by assigning, you will not be getting a mortgage, anyway. So, a no down payment deal is the way to go.

But if you buy a property with the intention of holding onto it for income, a "no down payment" deal can put you into bankruptcy! This is because a nothing down purchase results in a higher monthly mortgage payment (and adds the cost of PMI - Private Mortgage Insurance), which in turn reduces the net income - often to the point of creating a negative cash flow. Even if the cash flow is positive, it can become negative real fast if you end up with a vacancy for a couple of months!

FACT: the monthly mortgage expense on a nothing down deal, compared to putting the standard 20% down, is a whopping 45% higher! Ask any investor who owns income property just how fast he would go bankrupt if his mortgage expense were to increase by 45%.

So, we will tell you what the other "gurus" won't - use "no money down" strategies only if flipping, or if you are getting such a great bargain that even 100% financing will not wipe out the positive cash flow.

Our program teaches all the methods, so if you are a bit low on cash and/or credit, you can simply use the "no money down" flipping strategies to build up your cash reserves. Then, once you have those reserves, you can begin buying up income properties, using some of that cash to insure a good positive cash flow by putting up a good down payment.

No money down investing is not only possible, but easy. Falling off a cliff is easy, too, but I would not recommend it as a quick way to get off a mountain. Like any other endeavor, real estate investing requires the use of some good, old-fashioned common sense. And that is something we specialize in. Follow our plan, and not only will you get off the mountain quickly, but also in one piece!