Want to Buy Real Estate But Short on Cash?

Contrary to what many people think, there are MANY ways to buy Real Estate without either having the cash necessary to buy or borrowing from the bank. In order to accomplish this type of purchase the buyer must think “Outside The Box”, or to use an overworked term employ Creative Real Estate Techniques. In most cases the motivation of the Owner/Seller will determine their being receptive to offers to purchase with little or no cash being part of the deal. As situations change in people’s personal and business lives, their motivation to do many things also change.To quote from an old mentor of mine, Richard Reno, “Properties don’t have problems, people do.” This being the case, if you can solve a problem for someone, you can probably deal with them.As stated in the “Paper Chase” section, these initial strategies may be very basic to some of the readers, but not to others. I can assure they will be much more interesting as we progress. I personally learn best from examples of how something works. Therefore; I will use that method to illustrate ways to acquire real estate other than with cash down.Finance One Property With Another –Situation: Jones wants to buy Smith’s house priced at $100,000 but has no cash except for closing. Jones also owns a free & clear lot which has a value of $15,000.Possible Solutions:
Jones gives Smith his lot as a down payment and Smith finances the balance.
Jones creates a note on his lot for $10,000 and gives the note to Smith as down payment.
Jones sells his lot discounted to $10,000 cash to a builder then uses cash as down payment on Smith’s house.
Jones creates a note on his lot for $12,000 then sells the note to a note buyer/investor, discounted to $10,000. Jones uses cash as down payment on Smith’s house.Comment: This same formula can be used with personal property. For example, Jones may have a car, boat, airplane, etc. which he could give Smith as down payment or create a note on the personal property and use the note as down payment.These posts are the opinion of the author who is not engaged in rendering legal, accounting, or investment advice. If such advice is required or desired, the services of competent professional persons should be sought.