Dario Lorenzo has been buying and selling real estate for over 20 years. He knows the business of real estate investment: from buying at the right time, finding the right property, making the right improvements, and selling at a point in the market cycle that produces the highest possible profit.Dario began investing in real estate in Canada where he grew up. While learning the business, Dario began to research different markets including the United States.Knowing how to recognize emerging markets is one of the key factors in Dario’s successful investments, especially in markets with bad economies. Once the economies improved, Dario created tremendous value in his real estate assets.With the techniques he developed, Dario has been able to buy and sell real estate worth over $100 million dollars. He knows how to structure deals especially those done with no money down and other creative financing methods. Now Dario is ready to share that information with you.Dario speaks from his own extensive experience when he shares his techniques. Some of these investment methods are commonly used, others are less known. All Dario’s tips are useful, whether you are just starting out or you have all your money tied up in other investments.Not every deal can be done without money down. However, having knowledge of these techniques will help you analyze opportunities that come your way so that you can identify those that can be successfully executed with no upfront money.For investors who want to control as many properties as they can, Dario’s tips are essential. Here’s the second part of hi's checklist for creating new wealth.12. Issue Stock
Form a corporation and issue stock to sellers for their equity. It solves their management problems and starts a real estate business for you. They get an equity position in the company.
13. Acquire with Future Profits
Acquire the property at an agreed price, with the seller's equity to be paid out of future profits as the project is turned around.
Acquire the property at an agreed price, with the seller's equity to be paid out of future profits as the project is turned around.
14. Hard Money Loan
When you're investing in multi-family properties, hard money is also called "mezzanine financing". If the loan-to-value ratio is 65% or below, many mezzanine lenders will finance you with no money out of your pocket. Why? Because the value is in the property. If you default, they simply take the property, sell it for 85% of value, and still make money.
When you're investing in multi-family properties, hard money is also called "mezzanine financing". If the loan-to-value ratio is 65% or below, many mezzanine lenders will finance you with no money out of your pocket. Why? Because the value is in the property. If you default, they simply take the property, sell it for 85% of value, and still make money.
15. Family Loan
Do you have a family member with big bucks? Or a family member that has a lot of equity in a property that they can loan you some money from? Perhaps some family members have a lot of money in a savings account that they would like to get a bigger return on. Whatever the case, go to your family first and see what they will do to help you out. If you're smart, you will make it worth their while: either give them a decent interest rate on the money or (even smarter) give them some equity in the deal... perhaps 5%.
Do you have a family member with big bucks? Or a family member that has a lot of equity in a property that they can loan you some money from? Perhaps some family members have a lot of money in a savings account that they would like to get a bigger return on. Whatever the case, go to your family first and see what they will do to help you out. If you're smart, you will make it worth their while: either give them a decent interest rate on the money or (even smarter) give them some equity in the deal... perhaps 5%.
16. Acquire with a First and Second, then Sell the First for Cash
Buy a property with the seller carrying back both a first and second mortgage. Make the closing contingent on locating a buyer for the first at an acceptable discount, with the cash going to the seller as down payment.
Buy a property with the seller carrying back both a first and second mortgage. Make the closing contingent on locating a buyer for the first at an acceptable discount, with the cash going to the seller as down payment.
17. Land Sale/Leaseback
Offer to acquire the improved property, subject to finding a purchaser who will buy the land under the building out of escrow, and lease it back to you subject to the existing financing. Cash from the land sale goes to the seller as down payment. You get depreciation on the improvements, and you can also deduct lease payments.
Offer to acquire the improved property, subject to finding a purchaser who will buy the land under the building out of escrow, and lease it back to you subject to the existing financing. Cash from the land sale goes to the seller as down payment. You get depreciation on the improvements, and you can also deduct lease payments.
18. Pledge Future Income as Down payment
If you have a secure job or future investment income, negotiate with the seller to have your bank deduct a specific amount from your checking account each month until the amount the seller wanted as down payment is made. As additional security, you can give the seller a mortgage on other property to secure your performance under the agreement. You get immediate ownership and the seller eventually gets the down payment.
If you have a secure job or future investment income, negotiate with the seller to have your bank deduct a specific amount from your checking account each month until the amount the seller wanted as down payment is made. As additional security, you can give the seller a mortgage on other property to secure your performance under the agreement. You get immediate ownership and the seller eventually gets the down payment.
19. Lease Interest as Down Payment
When you are buying from a seller who is also a property user, offer one year's income in the form of free rental as down payment. The seller gets continued use for one year in lieu of cash down. You get ownership with all its burdens and benefits, but with no outlay of cash.
When you are buying from a seller who is also a property user, offer one year's income in the form of free rental as down payment. The seller gets continued use for one year in lieu of cash down. You get ownership with all its burdens and benefits, but with no outlay of cash.
20. The Performance Second
Used in variations involving cash as well as sometimes without cash, the "performance second" is designed to test the seller's faith in the value placed on the property. Buy at the seller's asking price with payments on the second mortgage subject to the income on the property. If income is less than the seller has represented, then the payments he receives on the second will be less than he would like. But if the net income is greater, the payments increase. The second mortgage amortization is consequently tied directly to property performance.
Used in variations involving cash as well as sometimes without cash, the "performance second" is designed to test the seller's faith in the value placed on the property. Buy at the seller's asking price with payments on the second mortgage subject to the income on the property. If income is less than the seller has represented, then the payments he receives on the second will be less than he would like. But if the net income is greater, the payments increase. The second mortgage amortization is consequently tied directly to property performance.
21. Broker as Lender
If you are working with a successful broker, don't count him out as a lending source. Considering that he will receive a commission out of the down payment, there is often the possibility that he might like to make a sound investment at a high interest rate, using in part the cash he receives as commission; that's cash he will not receive if your deal doesn't go through.
If you are working with a successful broker, don't count him out as a lending source. Considering that he will receive a commission out of the down payment, there is often the possibility that he might like to make a sound investment at a high interest rate, using in part the cash he receives as commission; that's cash he will not receive if your deal doesn't go through.
22. Line of Credit
Take out a line of credit secured by you personally, your property, another property you own, or—if you own a business—against the business or against your accounts receivable.
Take out a line of credit secured by you personally, your property, another property you own, or—if you own a business—against the business or against your accounts receivable.
Now You’re Ready to Buy Multi-Family Properties with No Money Down
As you can see, there are many different ways to structure apartment deals with no money down.
As you can see, there are many different ways to structure apartment deals with no money down.
The more creative you can get, the more opportunities you will have to get into more deals, and the faster you will create your own real estate fortune. All it takes is this checklist and your own imagination.
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Who is Dario Lorenzo http://www.squidoo.com/dario-lorenzo
Dario Lorenzo
Affinity Investments
Vancouver BC V6Z 3B8
604 688 2521
http://www.affinityinvestments.ca/
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