How Do You Find A Seller Who Is Willing To Sell With Zero Down Payment?

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“Joe, how do you find a seller who’s willing to sell with zero down?” – Jim Delaney, Memphis, Tennessee

Joe: That’s a basic, upfront question that I think a lot of you have come to my site to find out. To get right down to the basics, there’s a thing called seller financing which is where the seller holds the mortgage in the property. The seller may already have an existing mortgage on the property and you can pay them and they can pay the mortgage, or if they have no equity in the property, you can pay them directly on what’s called a land contract.
 
Joe: There are different zero down structures that you can use, and there’s a whole hierarchy I created to help you understand which one to use in any particular situation. It takes me a few hours to explain the whole hierarchy but I’m going to go through it quickly so that you can Google a few of these terms and get a feeling for how this process works and for why I put them in this hierarchy.
 
Joe: The hierarchy starts at the top and this is with you as the buyer. It’s going to be exactly opposite if you are the seller, but if you’re the buyer, the best way to buy the property is subject to the existing loan, which means they deed the property to you and you make payments on the property. You have complete control of that property because you have the deed to it.
 
Joe: The second in the hierarchy is “Multi-mortgage”. It’s also when they’re deeding the property to you, but this time they have equity in the property and you put a second mortgage on it so that you can still give them their equity for the property and then sell it on terms.
 
Joe: The third is land contract. They do not deed it to you, so it puts you in a little weaker position, but it still gives you ownership rights. You can record that land contract and turn around and sell that property with a real estate agent or refinance it after a year or so. That’s the third method in the hierarchy.
 
Joe: The fourth method is a lease with an option to buy. This puts the buyer in the weakest position but it’s still a way to buy with zero down. Typically, what we’re going to do if we’re selling the property, is sell it on a lease option and buy it on a “Subject-to”. We want to buy in the strongest position and sell it in the weakest position.
 
Joe: The reason we do that is because we have to assume that we are the most honorable and ethical person in the transaction and we know that we’re going to do the right thing, so we put ourselves in control of the transaction to make sure that the right thing is done.
 
Joe: That’s why you need to understand this hierarchy – so that at any point, you can always make an offer on someone’s property which will be profitable to you.
 
Joe: You’re always going to buy these with zero down. Don’t put any money down on these properties. There’s no reason to do that – there’s too many of them available out there that you can get for zero down if you understand the marketing and how to get people to come to you to sell their properties.
 
Joe: That’s one of the things that we do in the “Automarketer”. That’s what I teach in my mentor program and all of my training programs.
 
Joe: I also do something else called passive investing. But that’s a different animal altogether. That’s where your money is working for you. This is ACTIVE investing, which is where you’re going out there and buying properties with no money down and without using your credit and sometimes selling them and sometimes holding them and keeping them in your portfolio or your IRA. You can actually do that with seller financed deals because if you do it with “Subject-to”, they’re non-recourse loans.
 
Joe: There’s some really nice ways to do this that you can fill out your portfolio with and actually give you a sustainable long term ethical business that serves the people that you’re buying from and selling to. That’s the goal for me in my business in addition to making a lot of money and not working a lot of hours, and, doing that with automation and outsourcing. I hope that answers the question. Thanks.