Buyer with no money to put down. Help! - Posted by Gary Baird

Posted by Max (CO) on June 07, 2002 at 18:04:26:


Those two ideas are great for filtering. Obviously they won’t always work like you said but it does give some more information to throw in the pot and gives you a few of those “gems” as you call them. Glad you’re back posting again.


Buyer with no money to put down. Help! - Posted by Gary Baird

Posted by Gary Baird on June 06, 2002 at 15:10:21:

I just purchased a two bedroom one bath for 1750 plus 247 lot rent due today. It came completely furnished as the old owner moved to CA and left his son to pay the lot rent. My problem is I have a buyer who has been laid off so he has no down payment. He says he is going back to work next week. Obviously I will check to make sure this is true, but if I am able to get 7,000 for it, can this still be a good deal? This is only my second deal, so I am in need of guidance. Has anyone ever done a nothing down deal before?

Ditto re: all of the below plus one more - Posted by Dr. Craig Whisler CA

Posted by Dr. Craig Whisler CA on June 06, 2002 at 22:52:26:

If you have to wait for him you will in effect also be paying his lot rent meanwhile. Ouch.

Hey, ALL of you guys are beginning to sound just as hard-hearted as folks have been accusing me of being.

Well, they say misery loves company. Your miserable sons-of-guns. No love and charity in YOUR hearts. My mistress would NEVER let me be like that. She thinks its practically like being dishonest. Eh, Max? (~:

Regards, doc

Thanks for all the advice - Posted by Gary Baird

Posted by Gary Baird on June 06, 2002 at 22:09:37:

I would rather learn from your past mistakes than my current ones. I only considered this guy a potential buyer because his story makes sense based on the local economy. I intended to check his employment and renter history, but I talked to him tonight, and he is still interested and is willing to give me $200 to hold the trailer until he can get a month or two back on the job. His fiancee also has a job. If he does everything he says and I can check him out and everything is ok, do I consider selling to him after a month or two if no other buyer materializes?

No Money, No Job, NO BUYER! - Posted by Tony-VA

Posted by Tony-VA on June 06, 2002 at 17:15:38:

At what point do you even begin to consider this guy a BUYER?

He has no money down.

He has no income.

If you were a bank, would you lend him money? Of course not. If you were a car dealer, would you sell him a new car? No. Would you rent him an apartment? No.

We have all become anxious to sell at some time or another.

There is an old saying that charity and business do not mix. That saying may seem harsh but it is true. I echo Ernest and Karl’s experiences with trying to help people with no money down or no job.

Promises are like belly buttons, everyone has them and for the most part, they aren’t good for anything.

Take a step back for a moment and look at this situation from another prospective. If you were recently laid off and had no money, would you be trying to buy a house?

Tell this man that you are sorry to learn of his current situation. Ask him to keep you in mind and that you will do what you can to sell him a home in a few months, after he returns to work.

Be polite and move on to your next Buyer.


Gavin, PLEASE take their advice - Posted by Bryan

Posted by Bryan on June 06, 2002 at 16:58:45:


I bought a moblile home park about two years ago and always hear hard luck stories - please don’t listen to them - there is a REASON he does not have a penny to his name! Be patient and wait for a qualified buyer.


Re: Buyer with no money to put down. Help! - Posted by Karl (Oh)

Posted by Karl (Oh) on June 06, 2002 at 16:50:20:

I?ve sold a number of homes with no down payment. If I have a home that needs a lot of work, I?ve substituted the down payment for the buyer taking the home as is. The purpose of the downpayment, other that getting some of your investment money back, is to get some commitment from the buyer. If they put down some money, or have to do a lot of work on the home before they move in, its more painful for them to walk away. If they have nothing invested in the home, they’re just a renter, with a renter’s mentality. The buyer needs to put something into the deal up front, money or work or something.

But when I first started I let a few buyers talk me into no downpayment on decent homes. They all had unique stories to explain why they don?t have a penny to their name right now, but promise they will have enough each month to pay me and lot rent and everything else they need to live. Everyone of them has been more trouble than buyers that had a downpayment. My experience is that the people who don?t hesitate to request something for nothing have a strong entitlement mentality, and won?t mind making life more difficult for you.

When someone asks me to wave the downpayment, I explain it to them just like that. You’re going to hear a lot of hardluck stories that will tear at your heart, but business is business. Its great when you can help someone out who needs a break, but it sucks when you bend your own rules and get burned for your kindness.

Karl Kleiner

Re: Buyer with no money to put down. Help! - Posted by Ernest Tew

Posted by Ernest Tew on June 06, 2002 at 15:38:32:

Gary, your prospective buyer may not be a very responsible person. If he has just lost his job and can’t make a small down payment on a $7,000 home, how does he propose to make the payments? My experience has been that they will promise anything when they want to move in. But, after they get in, it’s a different story.

Although the down payment doesn’t have to be in cash, I would insist on something of value before allowing him to move it. It could be for doing needed fix-up work on the mobile home or a promissory note (secured with his pickup truck or other assets with some value, or personally guaranteed by someone with good credit–or any combination)

Re: Ditto: - Posted by Max (CO)

Posted by Max (CO) on June 07, 2002 at 01:19:21:

Doc, I agree with what everyone here has said. Nothing dishonest going on here. I in my tree-hugging, liberal, teacherness (pick a label, any label), would not sell to this guy without some sort of reasonable downpayment. I would probably look for a higher downpayment from this guy (maybe he can borrow it) because of his spotty job history in the recent past. Actually, I’d just run another add. The home sounds like a real money maker for the price he bought it and he might as well assure he makes money.

Good luck all,

only if - Posted by Steve W (WA)

Posted by Steve W (WA) on June 09, 2002 at 09:37:09:

only if you are willing to pay lot rent on a promise.

I say nope.

Re: Buyer with no money to put down. Help! - Posted by Gary Baird

Posted by Gary Baird on June 06, 2002 at 15:59:59:

He says he was laid off but they are about to call him back. This area has had some layoffs recently, but the economy here is picking back up. I appreciate your comments, and I will see if we can work this out. Being new I am anxious to get the deal done, but I want to make sure I do it right.

You know what Max? I actually gamble… - Posted by Dr. Craig Whisler CA

Posted by Dr. Craig Whisler CA on June 07, 2002 at 02:20:22:

…sometimes and take a chance on some of these types of people. Only I don’t really consider it gambling for reasons that may or may not be obvious to you by the time you finish this post.

Over the years I’ve become quite fond of ‘success secrets’ and ‘clever little niche markets’ with no competition.

I’ll share a couple of them with you now Max, because you have been so tolerant of my “Chuck” gene. Don’t think I haven’t noticed just because I haven’t said anythihng.

I often look VERY closely at the refuse etc. that everyone else is rejecting wholesale, and I’ve occasionally found a few gems among all of the detritus.

Welfare recipients as tenants is one. Most landlords reject them wholesale. Frankly when I was cracking the management whip I didn’t see much real value there either. But after a while I noticed a pattern emerging. There was a group of mayby 10% or so that always payed and payed and stayed and stayed. Never caused a problem. I guess all people get tired of being discriminated against and some really appreciated it when you gave them a chance. It doesn’t necessarily follow that because someone is poor that they don’t pay their bills. I ve found that most don’t but what about that 10% niche that does? They make teriffic tenants. But who wants the risk of trying to wade thru 10 to find one good one? Well noone of course but it may not be really necessary. I kinda of worked out a homemade scheme for weeding out the Dandelions. I mentioned this once in a post long ago but I realize now nearly noone has enough patience to go thru so many old archives so I’ll repeat it here now. I was once about to reject a guy who was about 60 years old because I thought he didn’t have enough income to pay regularily. I don’t even remember the numbers so I’ll just make a few up. Lets say the rent was $250 mo and his social security income was about $400 mo. He claimed that he normally made a coupe hundred a month selling hoemade jewelery at swap meets and that he could live on about a dollar a day for food when he had a nice garden going. Yeah, yeah, I thought. Then as I was about to say I’m sorry, something fell out of the wallet he was fishing through for his ss card. He picked it up and looked at it and said, “no that isn’t it”. “This is my car insurance card.” I looked at it. It was currently dated. I thought holy cow chips, if this guy is responsible enough to pay for car insurance on this tiny income, surely he would pay me. I tried him and he paid my punctually for years. I wondered if this could be applied to other rental applicants to determine who those 10% were who would pay, even though they had very low incomes and it worked like a charm. Among other credit and reference information I now ask if applicants have car insurance and can show me their cards. I bet this has been about 90% acccurate and predictive of which low income tenants will really pay their rent.

With the girls on welfare (as with many others too), I tried a different approach. They always give a good reference for their last landlord (usually an apartment). Its generally the name and phone number of their best friend who plans to ‘pose’ as their previous manager when I call, to give the deadbeats a glowing reference. I try to call the reference immediately, while the applicant is still sitting accross the table from me. After I ask a few questions and feel they are comfortably disarmed I casually slip in the question, “by the way, just how many apartments do you manage there in your apartment buiding”? If they are faking it there will be a little pause and some stammering before they answer (GOTCHA).

Regards, doc

GREAT IDEAS DOC! - Posted by Tobeykins

Posted by Tobeykins on June 09, 2002 at 14:50:09: