WIIRE 024: Strategies to Buy a Property with Low Money Down with Amelia & Grace

Welcome back to another podcast episode! We recently received a great topic request on Instagram to talk about low and no-money-down deals that we’ve each done so this week we are diving into exactly that. In this episode, we will be sharing three examples of deals we’ve done, all real-life examples from our personal portfolios, and we hope they are super helpful and allow you to think outside of the box!

Amelia purchased a single-family home in April 2021 after having found the deal through a local investor she saw working through Facebook Marketplace. But by the time she called him about the deal, it had already sold, so Amelia did a bit of research and found out that the seller owned multiple properties in the area. She reached out to see if he had other properties for sale and offered a package deal for multiple properties. This offer was for a 30-day close on four properties and despite dragging her dad along (kicking and screaming), it was a killer deal. Amelia and her parents partnered 50/50, but none of them had to come out of pocket for money with their creative financing techniques.

Grace also has done her share of creative financing and on her deal wanted to use instant equity that they were buying into. At the time she had one single-family home that was under construction and wanted to buy two duplexes (four units) for $255,000. 20% Down would have been $51,000, which she absolutely did not have at the age of 23 and only one year into her W-2. Even splitting it 50/50 with her partner wasn’t going to work, but Grace was willing to work some creative financing to make it happen. Grace knew the owner of the four units who had had a wholesaler approach him to purchase the units. Grace convinced the seller to let her look at the unsigned contract and told him, in short, that it was basically a piece of crap, and he should sell to her instead. The good news was that the wholesaler had already worked the seller down to his bottom dollar of $255K.

Grace called the bank she had used for a previous deal, which turned her down. She called a second bank, one she had been banking with personally, and spoke with the VP directly, who knew Grace and her background well and was willing to take the chance on her deal of 10% down. Being newly employed at the time and her boyfriend being unemployed, Grace turned to her sister to bring her in as a 3rd partner in the deal. Her sister agreed and this allowed Grace’s portion of the down payment to drop from the original amount of $51K to only $8,500.

The final example were going to share is the first (and only) deal Grace and Amelia have partnered on together. In a previous episode you heard us share that we purchased a property in Amelias hometown from one of her friends parents for only $38,940. Having mentioned to the seller about a year prior her interesting buying, the seller remembered that seed Amelia had planted.

One important thing to note about this deal was that the seller is moving and not taking everything with them, and was moving into an apartment and didn’t need the immediate seller payoff. Amelia and Grace negotiated to pay her one year after closing, so they could fix it up and flip it with no down payment. They planned to do some painting, updated the flooring, and sell it for between $60-70K. During the process, plans changed and they ended up putting a renter into the property, furnished, and with a few other unexpected expenses coming up, they had to do some additional work to refinance the property so Amelia could solely own the property and buy out Grace’s portion.

A few months in, Amelia refinanced with her local bank to purchase Grace’s portion of the property, which appraised at $65K. To buy out Grace’s portion of the property Amelia partnered with her parents because, despite Amelia financing the down payment, her parents adore the property and would like to flip it when the current tenant moves out. All in all, they were under contract for $38,940 and did a wrap mortgage for the financing, and paid her off in full after the 1-year time period.

One final recommendation...

Don't be afraid to wheel and deal with your bank. Some of them will say no, but some of them also might be interested in what you have to offer, especially if they know that you can get the deal done. So the first deal you do, maybe you won't be able to wheel and deal as much. But as you establish that relationship, just ask and make sure you're exploring all of those options.

We hope you liked the breakdown of these deals. As always, if you have any recommendations for future episodes, feel free to DM us on Instagram. We love getting your requests, and we will catch you in the next...