The World of Zero Down Investing

Zero down investing has been one of the big buzz words recently in the real estate investment industry and while there are many things positive about such a situation for a real estate investor, there are also some bits of information that need to be cleared up for anyone interested. Zero down investing can be a great experience for all involved, but having a better understanding of the process will give you a more realistic view of when to use zero down investing as a tool in your real estate transactions.

Zero down investing is not a one-size-fits-all prospect, so understanding a few of the available techniques used to accomplish the goal of zero down investing can help you decide if a particular situation is ripe for that type of financing solution. Not every situation will be eligible for a zero down investing technique, but knowing what is available will help you make that determination. Here are a couple methods.

The Double Loan
Typically, a seller will want around 75 percent of a property’s sale price up front in cash to even think about pursuing a possible real estate transaction with you. Getting a loan from a bank with no down payment for that 75 percent should not be difficult as there are many ways to get guaranteed for such a loan and many banks offer loans without ever delving into your employment status or income level.

So, with that 75 percent out of the way, the problem then becomes scrounging up the last 25 percent to complete the sale. Seller financing is one way to accomplish this and can often work out well for both sides. If the seller finances the last 25 percent of the transaction with no down payment in exchange for favorable terms, you have yourself a zero down investment accomplished through pursuing two separate pieces of the financing puzzle.

In this example, the seller will not only get a nice chunk of cash up front but will also have the benefit of interest-bearing payments over time as a nice investment. Of course, you will have two payments to make and the rent coming in from your investment property would have to be substantial enough to pay both payments, but those properties do exist. Many investors have accomplished investing goals through this method.

Enter the Note Buyer
Involving a note buyer in your zero down investment goal adds a layer of complication to the proceedings and should only be pursued if you truly understand what is being accomplished through involving one. In a note buyer scenario, financing is offered to a property seller in the form of two loans. One loan makes up the bulk of the selling price but is padded with extra value. Another loan makes up the remainder.

For example, on a $100,000 property, one loan could come in for $80,000 and the second for $30,000. Note buyers will purchase mortgages and other loans for a discount, in this case the $80,000 loan. By selling that $80,000 loan to the note buyer for $70,000, that cash is sent to the seller and the note buyer receives the mortgage note in return.

The $30,000 loan would be your responsibility but neither financing option entails a down payment. Obviously, income from the property would have to cover the payments on both loans, but if that math works out, involving a note buyer can accomplish a zero down investment.

Of course, all real estate transactions should be reviewed by experts in the field, whether that is a real estate lawyer, agent or other authority. Zero down investing is a large field and can stand as a term for a wide array of financing arrangements. These are just two ways to accomplish a zero down investing goal. Explore other methods to find the zero down investing method that works best for your real estate.

About the Author:
This is another original article by Joe Lane, co-owner of The Lane Real Estate Team at http://www.joelane.com/. Are you looking for an experienced Tri City WA Real Estate agency? With 20 years of service based, business experience, Joe and Colleen Lane work hard to serve home buyers and sellers for Tri Cities WA Real Estate, Kennewick Real Estate, Richland WA Real Estate, Pasco Real Estate, and surrounding areas. Website and SEO by 1stPageSEO.com

Additional Real Estate Articles and Information on the Web

How to Keep Your Shirt in Today's Real Estate Market
For a successful investment, you need to buy low and sell high. Unfortunately, this is not happening for most people in today's real estate market. People are panicking. And as a result are selling their homes for less than what they paid for them. All across the country, sellers are bringing money with them to closing just to get out from under what they view as a sinking ship.

Abu Dhabi Properties - Next to Dubai
Abu Dhabi has become a favorite property buying spot after recent changes in property laws. These changes were predicted by experts in real estate business predicted and there was much speculation. The changes mean that business of real estate will experience soaring prices in Abu Dhabi.

Carteret Decides to Exit the Market!
What Carteret Mortgage leaving the market says to the rest of the industry. Have we seen one of the biggest companies fall yet again? Is this a statement to all the larger companies with major over head? Who can survive in this market?

A Quick Guide to the Current Real Estate Market Crash
The news is full of reports about the real estate crash. However, there are still many local markets that remain virtually unscathed by the downturn in the market. If you live in one of these areas, you may think that your local market is safe and stable. You should know, though, that your local market can change quickly. And you need to prepare yourself for such an event.

Things About the Real Estate Market
Undoubtedly, Miami is a spectacular city known for its prevalent urbanization and beautiful environment. The city may seem like just another tourist spot, but it is constantly trying to prove that it can also be a good place for permanent settlement.

If a Property Has a Mortgage Can it Still Be Auctioned in a Tax Lien Sale?
A lien, in its extensive logic, is a legal claim upon a piece of property to secure the payment of a debt. A lending company, for example, has a real estate lien of a home that somebody has mortgaged.

Austin Luxury Neighborhood - Spanish Oaks
In the Hill Country of Central Texas 30 minutes west of downtown Austin is the exclusive, gated golf community of Spanish Oaks. With great golf, awesome views and a world class concierge service, Spanish Oaks is indeed quite special.

Buying a Home Vs Renting a Home
Home ownership is the American Dream and almost everyone would like to own a home. It is commonplace, however for most American to start out renting while saving up to buy a home. The questions is when to buy? The most common question in today's market-Is this a good time to buy or should I continue renting? Here are simple guidelines to help you figure out which option is best for you.

How Not to Lose Ten's of Thousands on Your Real Estate Deals
The answer to the question, why are inventory checks important, is pretty straightforward. It doesn't take a real estate wizard to realize that reviewing the inventory is a must before putting down one's hard-earned money to buy a property. Yes, I am willing to admit that the process of checking each and every item on the inventory can be highly boring, even frustrating at times. However, I think we both know that there is no denying the significance of carrying out this process efficiently and effectively. After all, you, as the buyer, don't want unpleasant surprises thrown at you later on. So it pays to thorough during inventory checks, than crying over spilled milk later.

Selling of Property in an Auction
Property auction is taking place for more than 160 years. It not only benefits the seller but to the buyer also because it is simple, open and efficient method of purchase. In England and Wales around 2.5% of properties are sold through auction.

Toronto Residential Real Estate - Do We Always Expect Multiple Offers?
Toronto Real Estate-is it all about multiple offers? Selling homes at realistic prices? Toronto real estate is still healthy. Toronto- Now is a good time to buy a home in Toronto- average prices rose July 2008 over July 2007 just over 1%.

Things to Look For in Your Mortgage Broker
The mortgage broker website must stand out from the point of view of the visitors and users accessing it. The overall impression must be that the design is user friendly and gives out the feeling of trustworthiness and of guarantee for the services provided. For this reason a mortgage website design must be eloquent for the message that the website transmits and so must the signals and the special options provided inside the website.

Hottest Beachfront Real Estate in the Philippines
The Philippines are a beautiful set of thousands of islands situated in South East Asia. The beauty of these islands is what makes them so popular for residents and holiday goers alike. The Philippines are actually over 7,000 islands but only 2,000 of them are inhabited.

Sebastian, Florida - A Great Place to Live and Play
In Florida, you have your places to live, your places to visit, and your places to explore; Indian River County happens to be a place of all three. Being a place of interest on the news as of the past few years, you may not have heard of one of its up-and-coming towns named Sebastian.

Realtor Loyalties
Realtors have an important role when it comes to buying and selling real estate. It is their role to bring buyers and sellers together. Without the assistance of local realtors it would be much more complicated to complete a real estate transaction.