How Do People Buy Real Estate With No Money Down

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What's up guys, it's James here and in today's video, I'm going to be talking to you about how people buy real estate with no money down. Now chances are, if you've been looking at real estate interested in investing in real estate, you've exposed yourself to the space, there are people out there that talk about this mystical way to buy real estate with no money down, or in other words, buying real estate without actually having to put up any of your own money. Now, there's a couple of ways to do this. And there's also some ways to put money in but then take it out very quickly and get yourself back to a no money in position. But in this video, I want to talk about one way in particular that you can really effectively buy properties without having to put any of your own money in upfront at all at all, and actually own the property. So that's we're gonna be talking about in this video. Now, if you want to learn more about how to leverage this strategy and other types of strategies to buy short term rental properties, and you want to start investing in Airbnb is in short term rental properties, and know all the ins and outs of that, then you're in luck in the description down below, there's a link that's not going to be around for long that link is to a free training that's going to walk you through all the different steps of how to invest successfully in short term rental properties. It's going to walk you through the three critical components to investing successfully in Airbnb, vacation homes, short term rentals, we're going to show you how you can buy some really cool properties that can even be vacation homes for you, and use them as an incredible investment and actually get an A fantastic return on investment. And these properties are some of the best cash flowing properties I've ever come across. This is an incredible cash flow opportunity for real estate investing an absolutely insane ROI that you're getting on real estate investing. So I highly recommend you check it out. It's put together by myself and our business partner Riley, between the two of us we've got over 11 years of in depth experience in Airbnb, I've worked with 1000s of people helping them with their Airbnb hosting, helping them do their performance managing other people's properties. And also real estate investing Riley's got an extensive background being a full time real estate investor. So I do highly recommend that you check that out in the description down below, there's a link, check out that training for how to invest in properties for short term rental, I highly recommend it, you're not going to want to miss out and that train is not going to be around for too much longer. So that being said, let's talk briefly about how to actually invest in properties with no money down. And I'm going to talk about one strategy in particular, that rally and I have leveraged from time to time in our portfolio as well. Now this strategy involves really, you know, at the end of the day, you end up putting no money down. So it's a pure true No Money Down scenario where you know, if I'm going into a deal like this, I don't have to put up any capital app. And basically, the way that it works is you're buying the property and you're going to end up with equity in the property and control over the property. So you actually own the property, and you don't have to put any money down. And the way that it works is you're basically in a work with a co investor, you're gonna have a partner in this particular deal. And what's going to happen is you're going to have basically the active partner and the passive partner, the passive or money partner is going to be the person that you're going to partner with. And they're going to typically be a person that has two things in any real estate deal, you can kind of break it down into four different quadrants. And this partner is going to have two of those quadrants covered. Now the four quadrants are going to basically be your money, your mortgage. So those are two things you need in order to make a real estate deal go through. One is the money for things like downpayment closing costs, renovation any other expenses like not, and the other is, obviously the mortgage, the mortgage capability mean that they can actually go to the bank, and the bank is willing to lend them 80%, or whatnot of the value of the home as a mortgage. And so they're gonna have to leverage their income or different qualifying factors in order to get that mortgage. And the other two kind of quadrants in a real estate deal are going to be the actual deal finding itself that off market property or that good deal on property and the management of the property. In other words, actually getting it up and running and making sure that everything runs smoothly for the lifetime of the ownership of that property. And so that's where you're going to come in, in this scenario of you want to be going in with no money down. And so the way that works is typically the way that we want to kind of break it down is that each one of those quadrants is worth 25% equity in the deal. So that means that if you're going to be working with a money partner who's gonna be putting up the money and the mortgage, then you don't have to put any money in, you don't have to get a loan, so you're not on the mortgage at all. And you're not going to have to put any money into the deal whatsoever. That means that they're going to be taking care of that and taking care of 50% of the equity in the deal. That means that they get 50% equity in the deal. And then for you, you don't have to put any of that in. But you do have to do a couple things, you need to be the one actually finding the deal, a great deal on a property and typically that's going to be an off market deal. Again, if you want to learn more about exactly how to do that, then check out the link in the description down below register for that training. Now the thing you need to do is manage the property effectively you be the one in charge of managing stuff, you know hiring people to manage stuff, but overall it doesn't mean that you need to be actually the one managing everything it means that you need to take care of all that. In other words, the other partner here is not going to be thinking about that worrying about that at all. It's gonna be completely off their plate because it's going to be on your plate and again, if you want to learn more about how to do that, then Check out the link in the description down below to access that free training. And so what's gonna happen is that now the investor is going to put up their money, they're going to put down the downpayment, the closing costs, renovation furniture, whatnot, they're going to spend that money, and then they're going to have their investment, and they're going to 50% equity in the total ownership of the property. And the total deal, that means that 50% of the equity is theirs, 50% of the cash flow is theirs, and 50% of the appreciation is theirs, if there is any, by the time that you sell the property, and then what's going to happen is they get a preferred return on their initial investment, meaning that typically, there's a few different ways to structure this one way is that they get all of the cash flow from the property until their initial investment is recouped, at which point and then the cash will be split 5050. Or another way in a way that Riley and I like to do things is we'll buy a property that we can use the bur strategy on which if you're not familiar with that, then check out the other videos on the channel where I've talked about how you can turn $60,000 into $125,000, in 90 days, another video I did on this and all the other videos out there about the bur strategy about a few of them here on the channel. And what that means is that you can get a refinance on the property and actually get the investor their money back through that refinance within about three months of buying the property, I mean, they can get their whole initial investment back. And then that means that then you can split the cash flow 5050 Right away, and you're going to constantly be building up equity, because a part of your expenses is your mortgage. So a part of that mortgage is going to go towards paying down the principal and half of that principal pay down every single month is going to be building equity for you. The property is also going to appreciate naturally, by about 2% a year conservatively speaking, sometimes a lot more than that. And obviously I'm talking about long term if you hold the property, not trying to time the market at all. But all that appreciation is going to be split between the two of you because when you sell the property, it's going to be sold for more than what you bought it for ideally. And that means that 50% of it is going to go to you and 50% of that gain is going to go to the investor. So that means that effectively if you have if you buy a property, so I'll give you a recent example of a deal that Riley and I did that have this structures, we bought a property for $750,000, where we put no money down and we worked with an investor to work with them. So they put in the money in the mortgage, and we would take care of finding the deal and taking care of the management. Now for that property, we're expecting it to cashflow about 234 $1,000 a month depending on the time of the year, it's obviously gonna cashflow a lot more than that in the summertime a lot less than that in the wintertime. But on average, we're expecting about three to $4,000 per month in cash flow. And that means that without putting any money at all into the deal, we're able to get about $2,000 per month in cash flow that we have every single month coming in from just one single property that we have no money into at all. Now it's pretty cool. The other cool thing is it because it's a $750,000 property, there's a decent size mortgage on the property. And so we're constantly building equity in the property. Now over time, the way a mortgage works is that at the start, the majority of your payments are going towards interest. But then as time goes on, more and more and more of your monthly payment is going towards paying down the principal. So we're constantly making more and more money, that we're building an equity in the property so that when we do sell that property, let's say in 510 1520 years, we're gonna get a big lump sum payout. And the other really cool thing is that we're also going to end up getting a appreciation on that property. If the property does and appreciate by the time we sell it, which for us, we have no intention of selling the property unless it has appreciated because it's cashflow positive for us, there'd be no reason for us to sell it and take a loss. So we expect conservatively speaking for that property to gain about two to 3% in value per year, which means that we're going to be protected fully for inflation, it means that we're gonna also get a really great return, because we don't have any money in the deal. So on that $750,000, if it appreciates by 2% Every year, that's about $15,000. That means that $15,000 Every year is just kind of going into our pockets. Now we don't actually get that money up front. So I don't tend to look at that as really locked in. But all things go to plan in 510 15 years, we're going to get a really nice sizable lump sum payout from a combination of the appreciation on the property and also the equity that we have built up from paying down the mortgage over the years. Until that we're pretty satisfied getting a nice $2,000 A month coming in from a property that we didn't put any money into at all, we also just get to control this property, we can have it in our portfolio, we can go and use it. It's pretty cool, pretty awesome, pretty fun to do. So that is basically how you can get into real estate without putting any money down. Again, if you want to learn more the ins and outs, obviously, I've only been able to cover at a very high level here, because there's only so much that I can talk about in a short YouTube video like this. But if you do want to learn more about how to invest in use these types of strategies to invest in short term rental properties, then I highly recommend that you check out the link in the description down below to access that free training, where I'm going to walk you through all this step by step, give you some different tools and resources and give you a good method to be able to go and actually execute on this and actually start getting into real estate this way for yourself. Now. If you'd like at the end of that free training video, you're also going to be given the opportunity to set up a call with either myself or Riley To talk more to us in detail and set up an actual absolutely free strategy session, where we're going to map out a game plan for you and show you how you can reach your goals with short term rental investing in the quickest way possible. Like I mentioned earlier at rally and I have a tremendous amount of experience in this domain. So there's likely a number of tips that we can give you that will help you to get to your goals a whole lot faster, with less risk, less opportunities for mistakes than if you were to go about it on your own. So if you're interested in that, that's going to be accessible to you as well at the end of the training video. So I highly recommend you check it out because again, we're not going to be keeping this open and available for too much longer. I highly recommend you check it out in the link in the description down below before it's too late. Now the last thing I want to share with you is that if you did like this video if you got value from it, please take a quick second to just hit that like button. It means a lot to me it helps you tremendously with growing this channel and also if you aren't yet subscribed to the channel, make sure you quit take a quick second and click that subscribe button so you can stay up to date because I do post two new videos every single week on this channel. So I want to make sure you can keep up to date with those as well. That's all for today's video. I'll see you in the next one.