Is it possible to buy a property with no money down? If yes, how?

Yes it is possible, Here are some instructions

Roll the down payment into the purchase price
Negotiate a separate installment plan for the down payment.
Work out a trade.
Get the seller to transfer the existing mortgage to you.
Talk to your bank. There are some banks that allow buyers to put little to no money down on real estate purchases.


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Everyone has heard a story or read about someone who bought a property without paying a single dime as a down payment. But how does this work?

There are several "classic" methods commonly used to purchase real estate with no money down. There are an infinite variety of situations in a real estate transaction that could lead to a deal with no down payment. But for the sake of reality, I will focus on those that are most commonly seen in the current market.

1. Seller second - The buyer obtains a new first mortgage for most but not all of the total purchase price. The seller finances the rest.

Purchase price: $100,000
Buyers loan: $90,000 (90% LTV) (new first mortgage)
Sellers finances $10,000 (in the form of a new second mortgage)
The buyer has borrowed 100% of the purchase price. Thus, you have100% financing, and no down payment was paid by buyer. This is not a difficult strategy to employ if the seller has enough equity, is willing to hold a second, and the first mortgage lender approves.

One thing that is not mentioned in most articles about this strategy is the requirement for lender approval. The lender who is making the 90% loan will have to agree to allow the seller to take back a second mortgage. In cases where the buyer has better credit, this is usually OK with the lender. But if the buyer has a lower credit score, the lender may not approve of this. If your credit score is on the lower side, but you have good documented income, you may still qualify.

Herein lies the fundamental issue that makes it so difficult to write about your financing options and what to expect: The fact is that lenders who are making the first mortgages on a property can change the rules or make new rules in the middle of a deal. Therefore every deal is different. Every buyer's credit and income are different and lenders vary in their underwriting requirements.

It is a moving target. So while it can be said that you can get a 100% loan to buy a property, there are usually specific credit requirements, income requirements, etc. It makes this game rather unpredictable.

Talk to your lender ahead of time and find out if creative financing options such as a seller second would be allowed. Make sure you have a lender who is used to working on investment property loans. Some mortgage companies only have programs for owner occupants. You need to go to a lender who specializes in loans for investors.
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Buy it out right with cash, never have debt or payments.