Do you think that you need a lot of money to invest in real estate? Not true. In some cases, you can invest in real estate properties for little or no money down. This is true especially in today's market when there are so many properties that are in foreclosure or heading to foreclosure.
One way to invest in real estate with no money down is to use the short sale flipping technique. A short sale is when you purchase a piece of property that is about to go into foreclosure. You can usually find short sales by putting up signs to help people out of their mortgages without going into foreclosure.
When you invest in the short sale, you can actually create money out of thin air. You do this because you are buying the property for a lot less than the market value and even less than what the bank is offering. In some cases, you will get the property for more than 30 percent off of the market price.
You will have to work with the original owner, the original lender and your own lender in order to purchase a short sale with no money down. The first person you approach is the owner. You have to figure out how much their house is worth in the current market and how much they owe. You then enter into a real estate contract with the owner for at least 30 percent off of what the market price of the home is valued at. The owner will want to do this because he or she can no longer afford the mortgage and simply wants to get out of the deal. They do not want to go through with a foreclosure because it will ruin their credit. Also, if the bank goes through with foreclosure, they usually get a judgment against the borrower for any money due for legal fees.
You can then present the contract to your lender who will do an application and an appraisal of the property. As there will be more than 20 percent equity in the property, your lender will be willing to give you the loan as long as it goes through for the price in the contract. You can then get a pre-approval from your lender for the and present the original contract and the pre-approval letter, along with a hardship letter from the original borrower, to the original lender. You will want to negotiate with whoever does the short sales at the bank.
By presenting a contract from a qualified buyer and a letter stating that the borrower is unable to make payments, the lender knows that he can either foreclose and lose even more money on the property or accept your deal. You get to purchase the property on the equity that you created by offering the owner less than the market value. The owner gets out of the mortgage without going into foreclosure and the original lender is happy that the property is off their books. You have purchased a piece of property using no money of your own (you will probably have to pay for an appraisal) and already have equity in the property. Not a bad deal.
Author Resource:-
For more articles and a 10 part e-course on how to create your own Ultimate Buying and Selling Machine! plus over 50 training audios, simply go to www.LarryGoinsFreeOffer.com where you will gain instant access
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