1. REI ETUTOR No Money Down Investing

2. What is No Money Down Investing? REI eTutor Different Investors Have Different Meanings Meaning # 1  No cash out of your pocket Meaning # 2  No cash or financing out of your pocket

3. No Cash or Financing REI eTutor You DO NOT pay cash for the property. You DO NOT obtain any type of financing for the property.  Conventional Financing  Hard Money  Soft Money  Owner Financing You DO NOT recruit another investor as a partner on the deal.

4. Earnest Money Deposit REI eTutor What is an Earnest Money Deposit?  Also known as a good faith deposit  A deposit made to the seller when the purchase agreement is signed. What is the Standard Deposit Amount?  Buyers’ Market: $500 to $1,000  Sellers’ Market: $5,000 +

5. Earnest Money Deposit REI eTutor What is our goal amount?  $10 to $100 Will sellers accept such a low earnest money deposit?  YES!!!

6. Earnest Money Deposit REI eTutor What is the Secret?  Find Motivated Sellers Motivated Sellers = Potentially Great Deals Unmotivated Sellers = Time Wasters

7. Proven No Money Down Buying Methods REI eTutor We use three proven methods to buying houses with no money down. 1. Wholesaling 2. Subject To 3. Lease Option Are there other options? Yes!  We focus on the simplest and most proven methods.

8. Wholesaling REI eTutor What is Wholesaling?  Placing a property under contract and assigning or reselling your interest. Do I need cash or credit to Wholesale? NO!!! Who does a Wholesaler sell the properties to?  Other Investors  Rehabbers, Landlords  Private Individuals  Cash buyers looking for a new owner occupied residence.  DO NOT DISCRIMINATE – People are not always what they seem

9. Wholesaling REI eTutor Buy Low Sell Low Goal is to obtain a contract at 20% to 40% below market value. Profit is made by assigning your contract or reselling your interest.  Average profit is $5,000 to $15,000 Can I make more than that? Of Course!  The larger the discount from market value the greater your profit potential.

10. Wholesaling REI eTutor Keep Your Greed In Check Always remember who your target market is.  Rehabbers  Landlords Your selling price must consider your buyer’s expected profit. Goal is to sell quickly  7 to 14 days

11. Subject To REI eTutor What is Subject To?  Buying a house “subject to” the existing mortgage. Examine the mortgage documents like a crime scene investigator.  Original loan term  How many years left?  Interest Rate  Fixed or Adjustable?  Monthly payment amount  Are taxes and insurance included?

12. Subject To REI eTutor What happens to the existing mortgage? The existing mortgage remains unchanged. The title is transferred to the buyer’s name. The loan remains in the seller’s name. Do you have to file any documents with the mortgage company? Do you have to be approved to takeover the existing mortgage? No. You are buying the property “subject to” not assuming the mortgage.

13. Subject To REI eTutor What is your exit strategy?  Fix (if needed) and Flip  Repairs Needed  Holding Time  Selling Costs  Lease Purchase  Cash Flow  Appreciation Rate  Buy and Hold  Cash Flow  Vacancy Rate  Replacement Reserves Always know your exit strategy before making an offer.

14. Subject To REI eTutor What is the Due-On-Sale clause? A clause that states the mortgage balance must be paid in full upon the conveyance of ownership. Is this clause enforced? Rarely. We have never seen the clause enforced or heard of it ever being enforced to date. Mortgage companies would be foolish to call a performing mortgage due simply because of a change in ownership. For FHA insured loans, the lender must receive HUD approval to foreclosure on the property and enforce the due-on-sale clause

15. Lease Option REI eTutor What is a Lease Option Contract? A contract to lease a property + An option to purchase the property

16. Lease Option REI eTutor How do I benefit? Little to no cash out of pocket. Obtain control of the property. Immediate profit with monthly cash flow. Low risk.

17. Lease Option REI eTutor How does the homeowner benefit? Obtain higher sales price than cash offer. Positive cash flow. No commissions. No maintenance. No land lording Tax benefits until day of sale.

18. Conclusion REI eTutor REMEMBER Every Offer Does Not Result In A Deal But Every Deal Is The Result Of An Offer