Question on possible 0-down idea, will it work? - Posted by J Finke

Posted by Lazaro on March 15, 2001 at 16:59:54:

J Finke,
A conventional lender will typically not go 80% to appraised value. They want to lend on the purchase price. Maybe go talk to a local bank. If you have good credit and have some collateral maybe a small local bank may do it. If you go hard money the lender will only give about 65% to appraised value. Try to get the seller to give you a higher second. How about the security deposits and the last months rents? They can also be used towards the down payment. How about higher price and lower terms? Raise the price and he will lower the percent on the second. Buy @ $250,000 and get a $200,000 first. Then, get the seller to hold back $50,000 @ a lower rate then before. Hope this helps. I have learned some of it from Ed Garcia. So, you know it is right. He knows what he is doing. If you have any other questions, just let me know.

Question on possible 0-down idea, will it work? - Posted by J Finke

Posted by J Finke on March 14, 2001 at 15:51:28:

I’m looking at a 12 unit complex with a 44k NOI. The asking price is 215k and the seller is willing to carry back 15-20K. With a conventional loan at 80% LTV plus 20k seller carryback that still leaves me with 23k down, which I don’t have.

Will this work: If the property could be appraised at 250K (which could possibly be done), the 80% LTV would come to 200K leaving 15k for the seller carryback and me with zero down payment. Can this even be done? Would it be considered fraud in some way? Would a mortgage company typically still want a percentage put down by the buyer? I could probably get my hands on 8-10k but would rather put as little down as possible (preferably zero). If I left any key information out, please ask and I will be happy to provide it. Any comments or suggestions would be appreciated.

Thanks in advance,

J Finke