A Zero Down, No Credit Deal Structure You Can Use Today

[joseph4176]

It's the same kind of loophole that there would be if you wanted to be a real estate investor, but your mom wanted you to be a doctor. You are going against her wishes, but if she's smart, she's not going to give you grief about it. Contracts work the same way - if you have to break them, the injured party has to decide if the damage you are doing is worse than the remedy they have. With this kind of deal, there is no injury - the lender still gets his money. Joe

[joseph4176]

It's the same kind of loophole that there would be if you wanted to be a real estate investor, but your mom wanted you to be a doctor. You are going against her wishes, but if she's smart, she's not going to give you grief about it. Contracts work the same way - if you have to break them, the injured party has to decide if the damage you are doing is worse than the remedy they have. With this kind of deal, there is no injury - the lender still gets his money. Joe

[cutelilmeeh]

Is the previous statement true? Or is there a loop hole to that statement? Mortgage companies probably use loop holes too to get their money from their borrowers, so what's so different with Joes techniques and trying to make money giving these techniques out?

[GreekVegetarianRecip]

Secondly, I have a friend who is married and only one spouse is on the deed (owned house before marriage). Both spouses agree to be on the title deed, however, the bank asked for money to transfer title to both. (Mortgage document states that if title changes acceleration could/would take place). Talked to two different lawyers. One said "go ahead and change the title", the other said it would be fraud. Which one is correct?

[joseph4176]

@GreekVegetarianRecip It is NOT fraud. Fraud is breaking the law - all they would be doing is breaking a contract and the contract has clear remedies for the lender in this case. But I've never seen a lender foreclose in a situation like this - especially in the current market.

[GreekVegetarianRecip]

Hi,

Two questions: (Yes, I am naive). Does the scenario you describe here, (subject to the existing loan), presuppose that the seller has equity in the house? You gave the 100,000 example where the seller owes 90,000. In other words, if the house were worth 100,000 and the seller owed 110,000 or more, this strategy would not work. Correct?

(Second question continued)...

[joseph4176]

@GreekVegetarianRecip It would be less interesting, but if the monthly payment was no more than the rent, it may still make sense because you are going to make immediate money by getting a lease option fee and you will get long term money, just by holding it... including tax depreciation and loan buy down.

[GreekVegetarianRecip]

@joseph4176 Thank you joseph4176!

[ynot1020]

I "lost" my custom built home when the bank I worked for went out of business...HOWEVER, I bought it on a land contract from the couple who built it and they had a mortgage on it. We closed with title and recorded the contract - no problem...When the market dropped, I exercised the option NOT to purchase - especially when they wouldn't budge on the price (no equity) and wanted us to make up the difference in cash! They moved in when we left after losing their other one.

[joseph4176]

Interesting. But one thing for others to remember - a land contract is not an option. A lease option would be an option with payments. I'm glad you were able to extricate yourself from the deal without ruining your credit. - Joe

[juliebingham]

This video training is over two years old - does this apply to the current real estate market? They say - real estate is ever changing. Perhaps this is something that worked then and not now.

[joseph4176]

I've been using this technique now for 24 years and it has worked in good times and bad. Right now is the Perfect Storm for this style of investing since there are so many sellers who will see it as a good option. If you learn the Zero Down structures I teach, it will make it possible for you to make an offer on any property you come across... an offer that can make you a profit. - Joe

[jacksge]

This does not work because it is subject to the current mortgage. 99.9% of all mortgages are not assumable. If you tried this today, it would activate the acceleration/due on sale clause that is written into almost all mortgages. If you do not notify the outstanding mortgage company of this transaction, you are committing mortgage fraud. This only works with a homeowner that owns the property free and clear.

[joseph4176]

I agree that mortgages are not assumable. They haven't been for years unless you go through full qualification. But what I'm talking about is taking the deed and taking over payments. There is a "due on sale" clause in all mortgages, but I've never seen a bank exercise it over the thousands of deals I and my students have done. In fact, the banks have actually thanked us for keeping their borrowers out of foreclosure. Sometimes you have to look at things a little creatively to make them work.