Where do I find cash for a down payment when I’m broke?
Here’s the typical scenario. You find a motivated seller that is willing to give you a great price, so you rush to your bank or mortgage broker to get prequalified for your loan. You tell them that you’ve found a great real estate investment and you want to know what the terms are.
The next day, they call you back. "Good news," they say. "You qualify!" Thrilled, you ask about the terms. You smile as they rattle them off, "You’ve got great credit, so we are able to do 6% interest-only, making your payment about $500 per month." Then they hit you with the big one. "All you need is 20% cash for the down payment."
If you’re buying a standard $100,000 starter home, that’s a $20,000 down payment! When you’re broke, they might as well ask for a million. So, what do you do? Convince someone else to make the down payment for you. This process is called buying a property for nothing down. For more detailed information, click the following question:
What are specific tips for buying real estate investments with
nothing down?
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