How Does One Buy An Apartment Building With No Money Down?
Truthfully how does one buy an apartment building with no money down? I mean, the idea of buying an apartment building with a multi-million dollar price tag, without putting any money down just seems preposterous! Is it real? Can it be done?
It is very real, and yes, it can be done. There are probably a few thousand apartment entrepreneurs across the country doing it right now. Let’s break it down and look at it, because once you understand apartments a little more you’ll see that buying this way is just the most effective way to put deals together.
First of all, “no money down” is misleading. There are always down payments made on apartment deals. Paying a down payment is the only way for a lender, or seller if owner financing, to minimize the risk they incur by extending purchase money financing. The more down payment buyer puts in, the more likely they are to make the payments. End of story. So no seller or lender is going to extend 100% financing on any apartment deal, there will always be a down payment required.
However as an apartment entrepreneur, you don’t put up your personal money for a down payment. To cover the down payment, closing costs, fees, earnest money, rehab cost, and any cash requirement the deal has, the smart thing to do is use Other People’s Money.
In French, entrepreneur means ‘problem solver’. Let’s face it, an apartment entrepreneur’s entire brief is to take a property which is essentially just a giant mass of problems, and one by one, sometimes two or three at a time … solve them. And that applies at the very beginning, when you are buying the property.