This is an interesting question. Somebody has asked me ‘does no money down really exist and if it does how do I do it?’. I did a video in the past all about options which is a fantastic way of doing no money down, and it is worth a watch.
One thing I have noticed when I have been online looking at the forums and looking at the Facebook groups is that occasionally you will see somebody saying, ‘no money down is illegal’.
It often seems to be the case that when they say that they have heard no money down is illegal, it is usually because the no money down techniques that they are referring to involves mortgage fraud. Clearly if it involves mortgage fraud then it is illegal, so don’t do it.
But not every no money down technique involves mortgage fraud, which is why you can do plenty of no money down techniques.
This includes the use of options, as I have already referred to which will allow you to do no money down. Other ways of doing no money down can be using delayed completions, again perfectly legal. It could be doing assisted sales. There are all sorts of techniques that you can use to do no money down.
Often times these are easier negotiated with a vender direct, but there are some estate agents that will, however not all estate agents. A newbie mistake is to walk into an estate agents and say ‘id like to do a money down deal with you’. They are going to look at you and think who is this person and what are they talking about, and probably show you the door.
Not all estate agents will understand it, but many will. It comes down to the choice of language, because essentially what a no money down deal is trying to arrange is the right to buy the property but not buying it today.
So that is why options work really well, and why delayed completion can work well. With delayed completion you can exchange contracts today, or at least when your solicitors can produce the contract, you can exchange contracts and then defer completion for a year, 3 years, 5 years, whatever the time period happens to be.
So, if you use the right language around it an estate agent probably will understand. You can say ‘I want to buy the property, but I don’t want to buy it today, could I rent it’.
Rent to rent really is a form of no money down particularly if you add rent to rent with an option. In that instance you can say to an agent ‘I would like to rent the property for 3 years, or 5 years, and if I will buy it at the end of the 5 years, can we agree the price today’. There are many ways of doing it.
There are courses on no money down which actually go for days and days and this is a quick post just to give you some general ideas. Perhaps if you are reading this you may not have even realised it was possible.
There is a whole exciting world out there to explore as to how to do property deals using very little or even none of your own money.
Here’s to successful property investing.
Peter Jones B.Sc FRICS
Chartered Surveyor, author and property investor
PS. By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same.
For more details please go to: