start with no cash. can it be done and how?

[quest2]

Hello there. I have been researching for some time on IP. I intend to buy,
improve a property and sell . I ve made some research on looking for very good deals and how to improve a property and sell again.
The problem is the initial spark to make this thing going. And yes i have no cash but the homealone deal seems to do the deal. has anyone got any ideas on how to start with no cash. ive good one idea from olly newlands no deposit method which i thought was very crafty. called the banks to confirm apparently its viable.
I am open to suggestions and hungry for many and especialy good ideas.

Regards

Justin

[SuperDad]

One way is to find a "joint venture" partner, whom you will share the profits with.

The problem with this option in your case will be lack of a proven track record.

Sometimes people have family who are willing to help them in this way.

Paul.

[Monkeyboy]

Hello there. I have been researching for some time on IP. I intend to buy,
improve a property and sell . I ve made some research on looking for very good deals and how to improve a property and sell again.
The problem is the initial spark to make this thing going. And yes i have no cash but the homealone deal seems to do the deal. has anyone got any ideas on how to start with no cash. ive good one idea from olly newlands no deposit method which i thought was very crafty. called the banks to confirm apparently its viable.
I am open to suggestions and hungry for many and especialy good ideas.

Regards

Justin

Tell us more about Olly Newlands idea. These ideas are not as easy as they once were.

I also ascertained rightly or wrongly from your post that you have your own home. Is this correct. If so then yes it is possible to get into IP without any money down. Dependiong on the equity in your own home.

Tell us more to give you a better idea

[quest2]

Olley Newlands idea

HIs idea is this.
Lets say you manage to get a deal on a property $25,000 below valuation on a $250,000 property.
So you take this valuation to the bank.
The problem is the bank term is let's say 90% finance on the purchase price or valuation price which ever "is the lower".
So 90% of $225,000 instead of you know how much!
So purchase price over valuation looks like this $225,000/$250,000 = 10%.
OK I know what you're thinking.
Initially you do need to come up with the 10% money down.
So 10% of $225,000 =$22,500.
So you got to hold this for 6 months get a new valuation and see the banker again.
The purchase price is no longer considered.
This time they will give you full finance on your valuation.
So you get your $250,000 and pay back the money down $25,000 and there's your full finance.
But I'm still open to any suggestion because I'm trying to have an open mind on this.
I need to get as many ideas as I possibly can in order to make an inform decision before I act.
Another thing is.
No, I do not own a home.
Buying my first property through Homealone to start IP is under consideration.
I know its a bit fast.
But I'm just thinking one step ahead.
And I believe I can do this.

[k1w1]

muppet, if you modified that post for punctuation etc, what is the "etc"? It certainly isn't grammar.

I've read it twice and am still at a loss as to how you can do that with no money down.

[Baron Silas Greenback]

HIs idea is this.
Lets say you manage to get a deal on a property $25,000 below valuation on a $250,000 property.
So you take this valuation to the bank.
The problem is the bank term is let's say 90% finance on the purchase price or valuation price which ever "is the lower".
So 90% of $225,000 instead of you know how much!
So purchase price over valuation looks like this $225,000/$250,000 = 10%.
OK I know what you're thinking.
Initially you do need to come up with the 10% money down.
So 10% of $225,000 =$22,500.
So you got to hold this for 6 months get a new valuation and see the banker again.
The purchase price is no longer considered.
This time they will give you full finance on your valuation.
So you get your $250,000 and pay back the money down $25,000 and there's your full finance.
But I'm still open to any suggestion because I'm trying to have an open mind on this.
I need to get as many ideas as I possibly can in order to make an inform decision before I act.
Another thing is.
No, I do not own a home.
Buying my first property through Homealone to start IP is under consideration.
I know its a bit fast.
But I'm just thinking one step ahead.
And I believe I can do this.

If you havent been able to save any deposit, then I doubt you will be able to afford a mortgage in the current climate, can I suggest you ease up on trying to be clever and save harder for a year or 2.

[mortgage broker]

If you get a gift you or if someone with a bit of equity in their house is willing to guarantee you, then you may get around putting down a deposit.

[SuperDad]

quest2,

That is not a "no money down" strategy.

That is a $22,500 down strategy.

Paul.

[Glen]

muppet, if you modified that post for punctuation etc, what is the "etc"? It certainly isn't grammar. .

http://en.wikipedia.org/wiki/Et_cetera 'etc' is an accepted abbreviation.

I've read it twice and am still at a loss as to how you can do that with no money down.

'No money down' I guess, is referring to using your exsisting equity in a property you already own, but not having to phsyically save that money again from scratch.

Yes k1w1 the post is confusing.

[Baron Silas Greenback]

'No money down' I guess, is referring to using your exsisting equity in a property you already own, but not having to phsyically save that money again from scratch.

Yes k1w1 the post is confusing.

He doesnt have any property to use the equity from.

[Glen]

He doesnt have any property to use the equity from.

I realise that from the previous posts Baron, thanks

[quest2]

so far so good. i see 2 methods conservative or partnership,

it seems to conclude theres 2 ways of doing this then. The conservative play safe way by saving up for a year or 2 which make absolute sense. and seeking a partner whom has equaty and split the profits.
i was expecting a more brain storming session but im quite happy of what i got anyways. $22500 strategy haaahaa good one.
im still keen though any more ideas anyone.

Cheers.

[quest2]

equity seems to be the key word for the banker. so i thought. if i get a good deal lets say. $250,000 in a property with a GV of $300,000. would that say i have $50,000 equity? How would the banker see this?
Just a thought.

Regards

Quest2

[SuperDad]

equity seems to be the key word for the banker. so i thought. if i get a good deal lets say. $250,000 in a property with a GV of $300,000. would that say i have $50,000 equity? How would the banker see this?
Just a thought.

Regards

Quest2

Hi quest2,

First things first, you will need to distinguish GV (which is purely a tool for rating purposes) from a registered valuation (which gives an indication of the market value of a property). The fact that a property has a GV of $300K does not mean it is worth $300K. The fact that a property has a registered valuation of $300K does mean that it is more likely worth around $300K.

As for the banker, he/she will only be interested in what you paid for the property. If the bank lends 80%, then they will lend 80% on the lesser of the purchase price or registered valuation.

Paul.

[revdev]

equity seems to be the key word for the banker. so i thought. if i get a good deal lets say. $250,000 in a property with a GV of $300,000. would that say i have $50,000 equity? How would the banker see this?

The banker's first question would most likely be "what's your income?"
And you would say........??