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Buying property without using your own money?

Discussion in 'Property Finance' started by Jesse Forbes, 4th Apr, 2016.

  1. Jesse Forbes

    Jesse Forbes Member

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    A concept I came across with 'purchasing property without using your own money'. I know that you can use equity to purchase property. But are there any other ways without putting any of your own money down? I've been reading books on property investing, and I've heard this come up a few times without it really being elaborated. Also, most of the books are armerican. So any info on this subject would be greatly appreciated.
     
  2. Mumbai

    Mumbai Well-Known Member

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    Only works in 'armerica'. No longer in Australia.
     
  3. Jesse Forbes

    Jesse Forbes Member

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    Would you please elaborate on that? Armecia haha I have no idea how that auto corrected if it was spelt incorrectly. My bad !
     
    Last edited: 4th Apr, 2016
  4. tobe

    tobe Well-Known Member

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    Mum and dad going guarantor, or finding a jv partner to stump up the deposit.

    Using first home owner grants can make the deposit very small for some purchasers.

    Buying property with a long term settlement (usually otp) can sometimes result in being able to borrow the full purchase price.
     
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  5. Johnny Cashflow

    Johnny Cashflow Well-Known Member

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    Get a whole bunch of stuff from Harvey Norman on interest free 60 months and then sell it all for cash and then use that money as deposit?
     
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  6. Mumbai

    Mumbai Well-Known Member

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    One of the ways apart from what tobe said is
    Owner finance. It s a direct agreement between you and the person selling the property. This means that you offer to assume a loan with the owner as opposed to securing a loan with a bank.
    You would generally offer to pay full price for the person’s property on the agreement that you would pay them on an ongoing basis without providing a deposit.

    This is not as common in Australia.
     
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  7. Jesse Forbes

    Jesse Forbes Member

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    haha creative !
     
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  8. Jesse Forbes

    Jesse Forbes Member

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    Thanks mate. Makes sense.
     
  9. Jesse Forbes

    Jesse Forbes Member

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    Thanks mate.
     
  10. Johnny Cashflow

    Johnny Cashflow Well-Known Member

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    It's not any of your money right :D
     
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  11. sanj

    sanj Well-Known Member

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    I actually did a bit of that for my first development, was maxed out on cash and credit cards so I got personal loans and also sold about 5-8k worth of stuff from my vague recollecrions that i got on credit.

    I found people who were going to buy something and worked out a small discount prior to purchase so wasn't a big risk or big loss for me.

    nothing wrong with some creative thinking...

    also gave someone an undertaking that I'd give them my 30k paid off car if they lent me 15k at low interest and it wasn't paid off in time, that 15k was put into an investment that returned a lot more

    another creative one was doing a contra deal with someone where they lent me money interest free to put into a business but in return for them I found a development site based on some really specific end goals, negotiated purchase, subdivided part of it, organised construction of a great product and charged them well under what I normally would and even then only based on them receiving minimum returns.

    I think they ended up only putting 400k into the project, did no work and made well over that in manufactured equity so ROI was massive and have positively geared long term rentals now so everyone won.


    on the other side of the shoe last year a friend's business was growing quickly but going through some major growing pains and someone was trying to rort /strong arm them. they sold me shares at a heavy discount to organise some external funding from others and I got an extra decent chunk in shares for solving some legal/commercial problems for them and cleaning up loose ends.

    a friend of mine worked for no fee instead of a 6 figure sum for a business for a couple of years on an ad hoc basis on the proviso that if he pulled some big wins off he'd get a huge chunk, could have ended up with zero but ended up with well into 7 figures.

    there are a hell of a lot of ways to skin a cat, no need to let a lack of capital prevent you from moving forward and sometimes you need to back yourself. I could've ended up with nothing if i didnt deliver on that business and same with my mate, in the end we both were well rewarded.

    other times this approach will fail but as long as your wins significantly outnumber your losses or failures then you're ahead.
     
    Last edited: 5th Apr, 2016
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  12. Ranin999

    Ranin999 Member

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    there is a website by the name BrickX which is a new concept also there is another team that I know of working towards similar to a crowd funding platform for a house deposit along with a credit union. I am not too sure how far off these guys are with the actual product release. But the question is if one can't come up with a decent deposit there is a doubt as to whether a mortgage will get paid out?
     
  13. Omnidragon

    Omnidragon Well-Known Member

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    Crowd fund a deposit, and make your stake proportional to the debt.

    0% downpayment. 80% upside.
     
  14. Rod.D

    Rod.D New Member

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    Hahaha that's creative. I've heard of people applying for a credit card balance transfer for 0% for 12mths-18mths with a high balance, waiting for it to get approved and then doing cash advances on the previous cards to come up with the money for a deposit. The problem is most can't pay off the card after the 12mths honeymoon period and then get slumped with 20%+ interest rates.