"No Money Down" deals possible with the lenders???

[rodimus]

Has anyone ever been able to get loan from lender while they get Vendor finance in part? Say u buy a property, and you get vendor finance 20%, and you put in $0 - $5000, and you loan 80%?

You know, those things that they teach in property investing seminars.... the "No Money Down" deals....

I mean, even if say you buy at a discount price below the market value...and then you get vendor finance... is it possible for the lender to lend you?

 

[skater]

Sure it's possible. Most vendors won't want a bar of it & there are only a few lenders (so I'm led to believe) that will touch it. I'm in the middle of dealings on one at the moment. I'll be the vendor in this case.

 

[Perp]

Sure is; but in my experience it's far more doable if you're buying commercial property, or if you're buying from a developer (residential or commercial). Most "Mom and Pop" vendors won't want to provide vendor finance. Skater is unusual in considering it for a residential purchase; but that's at least in part because she's an unusually sophisticated vendor. 99% of vendors will have no idea what it's all about, and most residential real estate agents seem to view these deals as "fishy" as well, and don't present them favourably.

Lenders in the commercial world don't really seem to care too much, as it's quite common. It can be done with some residential lenders; best to go through a broker who can guide you through the process.

 

[BayView]

Yes;

we did this with the B&B property we had. Some years ago.

We got a part loan from the Bank, part from the Vendor, part was our own funds and part was a solicitor loan.

The Vendor loan was for 20% of the purchase price, over 5 years at 2% above the going rate. The solicitor was for $20k; I can't remember the interest rate, but I remember it was higher than the going rate.

The MB arranged it all as we were in over our heads; "up to pussie's bow" he called it.

We had an interest only loan from the Bank as well to maximise the cashflow, and then we worked our ar$es off.

I think it is something that you might do in a hot market, but I reckon it is a bit risky.

If it a first time deal, I would do it on a cheaper property just so you could get started, but with a good buffer of servicability behind you.

This is because you are needing to borrow the whole amount, and the interest rates will probably higher than normal.

Since then we have done a number of others; but they were using equity in our PPoR.

 

[Peter_Tersteeg]

It can be done, but the lender must be choosen wisely. It's also good if you can show that you've got the funds to settle, even if you won't use them.

Your solicitor will need to generate a deed of priority, ie. who get's first dibs on the property if you default.

Now many vendors will want to do this, but they are out there. They tend to be the vendors who want a high price for the property, but have had a lot of trouble acheiving it. You'll probably have to make a lot of offers, and some of them may come back after a few months when they initially said no.

 

[live life]

it can be done.on houses and land for development.with no money down. here is afew i do Check with sellers how long they been there etc.check on titles office if they have a big mortgage or ask real estate agent etc use a multi offer system . i use about three offers on different kinds of payments over 12 /24/36 month payment. they will place this under the second mortgage. i bought a land development for 200 thou with the owners left in over 45% . but they made another 50 thou on the deal and which came to 250 thou. And to be paid over 24 months. i sold the property in 24 months for 700 thou plus g.s.t. for basically doing nothing just your home work.not all work but it doesnt hurt to try.