Mastering No Money Down Property Deals

Well , at the end of the day , I'm not a massive fan of the term no money down , because I always believe that there are some form of finance or money that has to be laid down when doing property deals . It's a bit of a buzzword thing , but it doesn't necessarily have to be your money . So when you say no money down , you can borrow money .

You can do all sorts of different tactics to do property deals , and I'm going to share with you some of those right here . Right now . When it comes to doing no money down , it can be done , and there's a lot of people out there doing these things very , very successfully . So what is one of the best ways to acquire a property no money down ?

Well , you've guessed it , the first one would be purchase lease options . Purchase options Call them what you will , but they are fundamentally an amazing way to do a deal on a property and not have to find big deposits . So what is a purchase lease option .

Well , a purchase lease option is where you find a vendor or a landlord or a homeowner who wants to sell their property but normally doesn't need the money right now .

They're quite happy for you to lease the property from them , maybe pay them a guaranteed rent each month and buy the property off them for a set price , which could be the price it's on for now in a few years time . Now why would they want to do this ?

Well , sometimes people inherit properties that they don't want to hassle , or they just don't know what to do with these properties . Sometimes people are having problems with the property , or it's become or the property's gone into disrepair and they cannot afford to do the property up .

They then they can't afford to rent the property out and it's just costing them a lot of money , so they look to sell these properties .

Now , sometimes these stick on the market and the one thing I will say is you're looking for motivated sellers when it comes to purchase lease option , and there will be more people that are not motivated out there than are motivated . So we need to be mindful of the fact that it's a numbers game when looking for these deals .

If somebody says to me my strategy is purchase lease options , and that's all I'm focused on then they are going to miss so many great opportunities and deals out there , and that's the wrong way to look at it .

You want to look at a purchase lease option as a tool in your toolkit , in your mind , that you can get out there and you can do good property deals and you can see whether that tool fits in with the seller of the property . If they need the money now . Now maybe they don't need all of the money now .

Maybe they need 10,000 pounds to go on a nice holiday or pay for some wedding or something , or 20,000 pounds , and maybe you can give them that chunk of change . But the property itself is worth a lot more . So there's all different ways you can do it , but fundamentally you do have to give over some money , so you have to give it a minimum of a pound .

Okay , a minimum of a pound . Now , again , for no money doesn't have to be your pound . You can go to a friend Let me quit , let me quit . You could do it like that so you could say it's no money down .

It doesn't necessarily have to be your money , but again , it's a very good way to get into property to start burning up a portfolio , but to get out there and help people as well . So , fundamentally , you're locking a price the purchase price of a purchase lease option , and that can be you know , three , four , five , six , seven .

I won't go over that if I were you . But seven years in the future you've locked that price in . Secondly , it's an option , so you have the option , not the obligation , to buy the property . At the end you want to make sure that you make any option assignable .

And listen , if you're not 100% sure about how to do purchase lease options , then do find out more , because they are very , very powerful . But you can also make huge mistakes if you do not know what you're doing . But you want to make the option assignable , so not necessarily you that buys the property .

So maybe in a couple of years time you're full intention of buying the property , but something's happening and you cannot do it . You do not want to lose the deal .

You want to maybe make it assignable and then , if you make it assignable , you can find an investor or somebody else to buy that property on your behalf , or they could buy it for you and you still look after it for them . So make sure that you've got an option and it's assignable . And , of course , then it's the lease .

A lease in is a monthly fee that you decide with the landlord or the homeowner to say what covers your mortgage and how can we do this . Now , when you're talking about mortgages , the property is unencumbered . I doesn't have a mortgage , happy days . If it does have a mortgage , you would want to know how long is left on that mortgage .

Okay , because you don't really want people remortgaging their properties . They'll be less inclined to want to remortgage your property if they're doing a lease option on it . And , of course , if it is somebody's home residence , you need to check the mortgage terms to make sure that whatever you want to do with it is actually allowed on their mortgage terms .

If it's on a residential mortgage rather than a buy to let mortgage , then you may struggle to let it out . You may be breaching mortgage terms . So there's a lot that can go wrong and we're not going into that here , but it's a great strategy for a no money down deal . Okay . Also , let's move on to the next one . Now we could look at vendor finance .

Vendor finance is brilliant stuff . It's really where the seller acts as a bank and you make payments to the seller instead of a traditional mortgage lender . These deals often require a very , very good relationship between you and the seller .

But if you can build up that rapport , if you can build up that no-liking trust , this can be very , very beneficial for all parties . Again , you need it to be either unencumbered no mortgage on the property or you need it to have a decent length of mortgage terms on there to make it worthwhile .

You also want to be using , as with purchase lease options , solicitors to draw up contracts . You want to have a heads of terms drawn up . You want to know what you're doing , what your end game is .

But again , if a seller doesn't need the money now maybe they've got a chunk of money coming out of that deal then you can potentially give them what they will get with their money put into the bank , maybe a bit more to keep them sweet , and of course you can then babysit the property , or you could buy the property off of them and with the chunk of change

that they get , they could loan that back to you and you can do vendor finance that way as well . Of course , you can also use them as a joint venture partner as well . But again , it's all about relationships . It's all about building up the no-liking trust . And that leads us on to the next one , which is JV partnerships joint venture partnerships .

Listen , if you don't have any money but you have the time and the skills to be able to do successful property deals , then you can partner up with people who have the money but don't have the skills and don't have the time . The key here , realistically , is to be able to bring value to the table , is to be able to do the deals on their behalf .

Now , a lot of people want to jump into joint venture partnerships from the word go . It's just an easy option . They'll meet somebody at a networking event or a training event or anything like that and then they'll say well , I'll tell you what . Let's do a JV , let's do a joint venture together . Listen , be very , very careful

Again . With a joint venture , you need to build up a no-liking trust . You need to get to know people .

Okay , don't just jump into any sort of deals like this that you do not know the person , that you haven't built up any trust , any no-liking trust , and you haven't built up that relationship , because you'll end up getting yourself into a very , very sticky position in a lot of cases . So you do need to know the person that you're doing this with .

If it's a family member or a close member of the family that you've known for years , that's a great starting point . Why ? Because you've already known them . You know what they're all about . So it's really just getting down to that .

But make sure you've got the relevant contracts , make sure you've got a good heads of terms between you and you've both got an end in mind , the end game . What are we doing with the property at the end ? What are we doing with the money at the end ? What are we doing with whatever you've decided to joint venture on ? Okay .

But again , when you're using somebody else's money , you need to know what you're doing , okay . So make sure that you are savvy enough to be in communities , like-minded people , communities that you know what you're doing . You've got the relevant education and relevant training to be able to help and support whoever it is that you're working with Okay .

The fourth one is you can do rent-to-rent deals . Now , you don't get capital growth with rent-to-rent because you never actually own the property unless you turn a rent-to-rent into a purchase lease option .

So what is rent-to-rent if you don't already know Well , rent-to-rent is where , fundamentally , you become a property management agent and you take on the landlord's property as if it's your own , taken on the utilities , the maintenance costs and everything . But you don't have to find big deposits , so it's no money down .

You could fundamentally do a rent-to-rent deal and it not cost you a bean . This , realistically for me , is the no money down . Now , most rent-to-rents you have to put a bit of money into the property , maybe a bit of dressing , a bit of painting , anything like that . But you can do a rent-to-rent deal .

I've helped people and I've done rent-to-rent deals myself where we haven't actually had to spend any money whatsoever . So no money down , happy days , but we don't own the property . So it's not like you're requiring a property no money down . Maybe in the future you are .

And I always say to my landlords as well if you're ever interested in selling the property , please let me know , because I may be very , very keen to buy off you either now or in the future . So rent-to-rent is a great one .

And of course , rent-to-rent works best with the HMO strategy Houses of Multiple Occupation , where you let the property out room by room on individual ASTs , as it is at the moment , or if it's a smaller property , you can do short-term rentals , service accommodation , airbnb , bookingcom , those sort of things as well , and all they do is they give you more cash flow

in the properties , which means then that you can give a good rent to the landlord each month , you can cover the cost of the utilities and anything else that you've got there and , of course , you make your margin by being able to let the properties out for more money . It's a great strategy to use when done correctly .

So , again , make sure you know what it is that you need to be doing . Make sure that you're surrounded by people that can help you and support you , so that you don't go wrong and you can get stuck in .

And there are landlords and there are investors and all sorts of people out there at the moment that need our help okay , that need our support and need our help . So another way that you can do property deals is basically , you know you can use investors so we've talked about joint venture partnerships but you can just use investors .

So somebody lends you 50K , 100k of money for basically a return on their money . So you could say I'll give you a 5% return annually on 100 grand or whatever it is that they decided to loan you . Equally to that , you could give them a monthly return on it . You can . You can structure that in all different ways .

You can look at doing crowdfunding yourself as well , which is where you get a pot of investors all to pull the money into the pot and then you do it through a company and basically you can give that company either first charge or that company owns the properties and they've all got percentage share in there .

That's if you have a lot of investors , that can get complicated . So , again , make sure that you know what you're doing there . But it is another way of being able to use other people's resources and money , given them what they want , so you get what you want .

There are , of course , companies out there that do crowdfunding as well , so you can check those out and SAS pensions as well . So some people will have SAS pensions , which is a great thing that you can use .

If you've got a private limited company and you've got pensions from different businesses or potential different people that you've worked for , you can use those pensions , put them into a pot together , put them into a SAS pension . That doesn't mean that you can start going out there spending the money .

But what that does mean is you can start loaning the money to your business , your property business , and to property deals . Now , those property deals do have to be commercial property . When I say commercial , that's a bit like your shops , offices , pubs . They're all sort of commercial properties . They're not your residential houses , flats and things like that .

So you have to be doing deals on commercial properties . You have to also be able to show how you can pay this money back and you cannot do the full amount . You can probably lend about half of your SAS pension to 25% of it , depending on the deals , the criterias , and again , there's a lot of red tape to go through on that .

But SAS pensions are brilliant . There's more and more landlords that have SAS pension meetings as well as network and events where they're looking at seeing where they can put their SAS pension . And the great thing about a SAS pension is you've got more control over it yourself .

So if you have your own limited company and you've got some pensions sat around , they're probably worth more than 75,000 pounds . It's really worth looking at doing that Because , a you can lend your SAS pension to other people and , b you can lend it to your own business as well . So you've got full control to help you build your own property portfolio .

I could keep going here , because there's people who've got massive amounts of equity in their property that you can help them maybe release the equity and use that for further investing . The list goes on , and what I'm trying to say to you is , if you're enjoying this is , make sure you get educated in all of the different things that I've spoken to .

You don't have to know everything at first , but you need to surround yourself with like-minded people that do , so . Make sure you're going out there in your network , supercharge your property investing . So I hope you've enjoyed this . If you have , then please feel free to like it to share , to leave us a review , leave a comment below .

Let us know if there's anything else that you'd like us specifically to talk about , maybe something that I've touched on here today that you'd like me to dig deeper into , and we are more than happy to help and support you , and I look forward to you joining me in the next episode . You take care and bye for now .