Part 1: The Three Keys to Every Profitable No-Money Down Deal

Part 2: If You Can’t Get Your Money Back in 6 to 12 Months, Why Do the Deal?

There are some sellers that you need to make all-cash offer to, such as offers on bank-owned properties.  In those cases, asking the seller to carry back the financing is an absolute waste of time, effort, and offer agreements. 

It doesn’t stop there.  Most people have been so conditioned by the “normal” way to buy real estate by realtors that asking for terms from the seller isn’t even a consideration. 

As a result, most real estate investors only negotiate on price when making offers on real estate. 

But when you are negotiating one-on-one with a motivated seller who has equity in his property, you can introduce any number of offers.

In his book “The 100 Absolutely Unbreakable Laws of Business Success”, Brian Tracy points out “the terms of payment can be more important than the price in a negotiation”. 

Price is only one factor among many others in a real estate deal.  For any real estate purchase, other factors include

1)      how much the seller plans to carry back,

2)      the interest rate of the note,

3)      the frequency of payment (monthly, quarterly, yearly, etc.),

4)      when and if a balloon payment is to occur,

5)      the length of time in which the note is paid out,

6)      any extras thrown in, like appliances, repairs, etc.

When you negotiate with a seller, you can use any or all of these factors when making offers. 

I’ve heard T. Harv Eker call a negotiation like juggling balls. 

When price goes down, some of the other terms go up.  That means more cash up front, right away.

When price goes up, some of the other factors go down.  That means less cash up front, more cash paid out over time. 

The important thing to remember of about no money down deals is that most people blow it when it comes to putting together the terms of a no-money down offer. 

On free and clear properties, I will almost always include an offer of the seller’s full asking price.  One of the corollaries of Brian Tracy’s law of terms is that “you can offer almost any price if you can decide the terms”.  So offer a high price, a monthly payment that will allow the property to cash flow, and a low interest rate. 

The trick is to make these offers every time you are in a position to make an offer to a motivated seller with equity.  Most of your offers will be declined, but you will jump for joy at every offer that is accepted.