The TRUTH About No Money Down Real Estate

The TRUTH About No Money Down Real Estate


What’s up everybody? I am Jaspreet
Singh and welcome to the Minority Mindset. No-money-down-real-estate?
Ugh. That’s not even possible. Buy real estate with no cash or credit?
Ha. This must be a scam. Make money in real estate with no license and no experience?
How is this even possible? If you are involved in real estate in any way shape
or form, or you want to be involved in real estate, you’ve seen the Facebook ads,
you’ve seen the books, you’ve seen the courses, you’ve seen the YouTube videos,
but what is this no-money-down-real-estate thing, and how is it possible for
you to make money in real estate with no cash, no credit, no license, and no
experience? I mean, who doesn’t want to make millions with nothing? Well, you are
in the right place because I’m going to break down how no-money-down-real-estate
actually works from my experience, because I actually have been involved
with these type of deals. But, before we get into that, make sure you hit that
thumbs up button below, right below this screen, because it’s kind of like a
virtual high five. When you hear the words no-money-down-real-estate, people
are talking about one of two things, First is wholesaling real estate. I got
into real estate from the investment side. I bought a small condo, and I rented
it out. I love this whole idea of getting passive income from investing in real
estate, but, buying real estate is expensive, and I realized if I wanted to
buy more real estate, I needed more money. That’s when I went out, and I got my
license to be a real estate agent. I was working at a brokerage called, Keller
Williams, and my boss happened to be a teacher, who taught this thing called
“real estate wholesaling”, which I had never heard of. Long story short, my boss
invited me to one of her seminars where I ended up paying thirty five hundred
dollars for a course to learn this no-money-down-real-estate wholesaling
system. I am going to save you three days of your time and explain how wholesaling
works right here. So, in any given market, 95% of homeowners—when it comes time for
them to sell their home—they will want top dollar for their home. So they’re
going to go to real estate agents, and they’re going to decorate their home, and
they’re going to make it nice, this way they can get top dollar. That’s not who you’re
working with here. In any given market, there’s going to be a small percentage of
people—maybe 5% of people—who will want to sell quickly. they’re motivated
sellers. Maybe they went through a divorce, or maybe they had a bad tenant,
or maybe they had a job change. Whatever it is, they want to get out of the home,
and they want to get out fast, so they will be willing to sell you their
home at a deep discount. Let’s say this home right here is worth $100,000, and
for the sake of this example, this homeowner is very motivated, so you come
in—so this hundred thousand dollars is the market value—you come in, you find
this home owner, and you enter into a contract to buy this home for ninety
thousand dollars. Now, you could buy this home yourself if you wanted to, but that
defeats the whole purpose of this no-money-down thing. So, you enter into a
contract to buy this home, and as soon as you do that, you’re going to turn on your
marketing, and then you’re going to market this home to a new buyer for a higher
price. So you’re going to find a cash buyer, like
maybe an investor, who wants a discounted home, and you are going to sell
this contract to this new buyer for ninety five thousand dollars. Now what
happens is, this buyer comes in with ninety five thousand dollars, and then
ninety thousand dollars is going to go here to this previous homeowner, and now this
person is happy because they sold their home, and they got their cash, and they got
to leave, and then this person is happy because this investor or whoever this
person is, got to buy a home at a discount, and then this remaining five
thousand dollars goes to you as your wholesale fee for putting this deal
together. The best thing about this is, you don’t need to have a real estate
license to do this in most places, and you don’t need a lot of cash to flip
these properties because you’re entering into a contract to buy a home without
the intention of buying it. And now when you enter into a contract to buy this
property, you get certain rights which allow you to market this property for
sale, and now you can essentially flip this home to somebody else, but you don’t
need any money to do it because you’re not actually buying the property, and you
want to have certain rights in this contract saying that if you can’t find a
buyer, you can back out of the deal, this way, you really have nothing to lose.
The key for wholesaling to work is you. You need to work if you want wholesaling
to work. When I first started wholesaling, I did not close a single deal for the
first three or four months of me doing this, and that was kind of rough because
I was getting rejected again, and again, and again. But the next month I closed
two deals: the first one, I made $10,000 and the second one,
I pocketed $7500, and that’s when I started to understand the whole process,
and things started to pick up. You need to find the right sellers who are ready to
sell at a big discount, and you need to find the right buyers who are ready to
buy quickly. Both of these people exist in every market, and this is where you
can make your money if you can connect these people. If you want to learn more about
how you can start wholesaling real estate, and how you can start doing this whole system,
you can read: Cody Sperber, Clever Investors’ free ebook on how to wholesale real estate.
The e-book is free, and you can download it by clicking the link up here or by
clicking the link in the description below. I flew out to Arizona to meet Cody,
who wrote this book, and I even walked through some of his deals, so I know he’s
good. The e-book is free, and his company has more advanced courses and programs
that you can purchase—You’re not required to purchase anything but if you do, we
will get compensated, but there’s no additional cost to you, so if you want to
learn more about how to do this, I’ll put the link in the description below. The second
way you can do no-money-down-real-estate is, 100% financed deals.
Let me show you what this means. So, let’s say you want to buy this property which
is worth a hundred thousand dollars again, this is the market value. So, you
don’t have a hundred thousand dollars to buy this property, so you run over to
your bank, and you say: “Bank, can you loan me some money to buy this property?” So,
the bank will do an appraisal, and they say: “Sure, this property’s worth a hundred
thousand dollars, and we will give you eighty thousand dollars, but not a penny more”.
So, the bank is willing to give you eighty thousand dollars, but that means you
still need to come up with another twenty thousand dollars if you want to
buy this property. At this point, you can either come up with the twenty thousand
dollars yourself, if you have the twenty thousand dollars sitting in your account,
but that would defeat the purpose of this whole no-money-down system —or— you
can go to this seller right here—this happy seller—and say: “Hi Mr. and Mrs.
seller, would you be willing to do a land contract which is seller financing, and
give me twenty thousand dollars in this property? Meaning, a twenty thousand
dollar loan because you have a lot of equity in your property”. Now, the seller
is not going to actually give you a check for $20,000, you’re going to give the
seller this eighty thousand dollars, and then
the sellers going to hold back a note, meaning, you are going to have to start
paying the seller payments on this $20,000 that they are giving you through
this property itself. So, they’re not going to give you the $20,000, they’re just
going to give you the property, but only taking $80,000, and then this other
$20,000 is a loan that they’re giving you through this property, and then
you’re going to have to make payments on this $20,000. So now, you own this
property, you paid nothing out of pocket, but you have two loans. You have to make
payments to the bank for this $80,000, and then you have to make payments to
the seller for $20,000. The goal here is to rent out this property to a tenant,
and then hope that the rent that your tenant pays is enough to cover your property
taxes, your insurance, your maintenance, and then your loan payments to your bank,
and your loan payments to the seller including whatever interest you have to
pay. I have been involved with no-money-down-real-estate deals like this, but
not as the buyer. I have been involved as the seller, where I gave a buyer a land
contract, where I gave them the property without asking for all the cash upfront,
and in exchange they had to pay me interest for owning this property that I
gave them. I’ve also bought a property from a buyer who did this exact same
no-money-down thing. They bought a property with no money out of pocket, but they
didn’t know how to manage their property, so they were bleeding money every single
month, and they were so upside down on all of their payments that they were a
very, very motivated buyer, so they were willing to sell me their property for 50
cents on the dollar. It’s kind of like that wholesale example I was talking
about before. When I entered into a contract to buy it, I could have flipped
that contract and sold it to somebody else, but I had the cash at this time and
I wanted to buy this property for myself. Can this no-money-down-real-estate
investment system work? Yes. Some people have done it very successfully. But I
would never do this, because when I invest in real estate, I invest for cash
flow, not for a headache. The more debt you take on,
the more risk you have; so, if something bad were to happen, you are much more
likely to feel the effects of it. There’s more than one way to do real estate and
you have to find the right way for you, and if you want to learn more about how you
can start investing in real estate, I’ll put a couple of videos for you to watch in the
description below. Thank you for watching, if you enjoyed
the video, share it with one friend, and if you don’t want to miss our new videos
every Monday, Wednesday, and Friday, then subscribe to the Minority Mindset YouTube
channel, and hit that little notification bell, that way YouTube actually lets you
know when our new videos are released, and as always, KEEP HUSTLIN’ *

56 thoughts on “The TRUTH About No Money Down Real Estate

  1. If you don’t have 20% down payment be prepared to pay private Mortgage Insurance for years. That’s why people rarely get to own their Home.

  2. I’ve been getting signs that I’m supposed to become a wholesaler for extra side income. When the signs roll in you must listen.

    Met a prominent wholesaler YESTERDAY because I FINALLY went to a BiggerPockets meetup. He also does rental arbitrage through Airbnb!

  3. Heyyy Happy Valentine's Day, Jus wanted to ask some queries to you, Can I mail my queries to you, so that I will be little clear what should I do in my life?

  4. Thanks Jaspreet! I'm starting my real estate journey now. The no money down idea SOUNDS great, but the debt load backs you into a corner. Less leeway for errors. If folks have no reserves for major repair they are sunk. If the market dips, and you are below water, selling would be done at a loss. Wholesaling would be the less risky no money investing strategy. Just make sure to talk with a lawyer and wholesale within the rules of your market.

  5. You know Jaspreet looks through info on newly divorced people and kocks on their door like, I was just wondering if you would be interested in selling your house. 😁

  6. @minority mindset Let's say after 1 year you can't pay the loan to the bank anymore. What happens with the loan to the owner of the house ? Is he just losing the money that you promised to pay back ?

  7. Have you ever thought about starting Minority Mindset podcast? Inviting guests to talk about money, real estate, and business. That would be awesome!

  8. Fifteen thumbs down viewers missed giving you a high five instead put their hair between their hand like they are so cool.

  9. Very good introduction to wholesaling and the emphasis on education. There's a lot to learn and laws are changing as more people get involved in real estate. It would be a good idea for folks to join their local Real Estate Investing Association to network, share deals and knowledge, and band together to fight bad legislation.

  10. Thank you for watching! If you enjoyed this video, you should watch – The Smartest Way To Invest $1,000: https://youtu.be/QL3_WAbFBmw

  11. So you would recommend the first method of finding a buyer and motivated seller, but not the method which makes you get more debt? I could agree if thats what you’re saying.

  12. What about city grants for First time home buyers. Such as me. Where I don’t have a proper down payment but I qualify for a city grant? Miami dade county offers many grant programs.

  13. My first deal was suppose to be a wholesale, but I did so well on it I decided to take it myself and flip it instead and I haven’t looked back since! Now almost 4 years later I’ve done 9 deals and am nearing financial freedom! Great video! Thanks for sharing!

  14. Thanks for the help friend! Love the honesty. I hope all is well with u all out there! We got this guys with Jaspreet as our main guy!!!

  15. Don't want to be a Downer Dave but "Nothing Down", "Flip This House", "Day Trading for the Beginner", "Options Made Easy", and the new "Trading Precious Metal" training and schools tend to promulgate at the end of bull markets and economic cycles. Money that is not respected, cultivated and cherished goes looking for a home. And desperate people who suddenly realize they have missed or pissed away the last bull market look for shortcuts to make up for lost time.
    None of this works if you are broke. Does it sometimes? Sure. And people win the lottery. But do you want to bet your financial future on that?
    Be sure you have your financial life in order. If you have $60K in student loans, rent is $1,200, car payment $600, $7K credit cards and all the rest, unless you have a great job getting into "No Money Down" real estate is a recipe for disaster. And even then you may not be able to out earn your stupidity.
    I base my advice on Phoenix and Las Vegas in 2008 to 2015. Hundreds of millions lost by those who knew they were smarter than the average bear.

  16. This was super informative and I dibbled and dabbled in wholesaling buy I’m actually thinking about getting back into it. Thanks for the video.

  17. This channel is so educational. Haven't tried investing on real estate yet but I'm slowly picking up the necessary knowledge.

  18. anyone that has a smartphone can make profits on line with, just Google excluding gaps E a s y L a p t o p L i f e .c o m

  19. Good one. The wholesaling approach to RE is too much of the kind of work I least like doing, so not for me, but I can see how it would be a fantastic business for the right person.

  20. Third way-VA home loan.

    My family got burned on something similar to a land contract. Sold My grandpa's farm to a land developer for WAY more than it was worth with the condition that he would receive the title and be allowed to defer payments for a year, pay just interest for five years, then pay the principal and interest for the last five. By the time his year deferment was up he'd run into financial trouble and was unable to make payments.
    My family didn't worry too much about it because we understood we were in first postion so he would either come up with the money and pay us or return the title. What we didn't know was as soon as he had the title to the farm he took it to a lending company and used it as collateral to borrow millions of dollars which put the lending company in first postion and my family in second position. When the developer defaulted on his loans the lending company got the farm and my family was left with no land and no money.

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