In a no-money-down deal, you are basically looking to control a piece of property without any money coming out of your pocket. That control will require the cooperatio of a properly motivated seller who is willing to finance your purchase, hold a second mortgage in lieu of a down payment, or provide you with an option to purchase the property at a later date.Then, once you've secured his or her cooperation, you can go out and find your own buyer or seller. The idea is to control the property for a short time before flipping it to another buyer and collecting the spread between what you paid for it and what you sold it for.
Here are seven basic ways to structure a no-money-down deal:
1. Have the owner provide all of the financing.
2. Assume the first mortgage and have the seller carry a second.
3. Create a wraparound mortgage.
4. Obtain financing from a hard money lender.
5. Arrange a lease option.
6. Promisory note.
7. Obtain a new first mortgage from a community bank or through a mortgage broker and have the seller carry second mortgage.
