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no money down RB

This topic contains 7 replies, has 0 voices, and was last updated by Avatar of cynthiaholiday cynthiaholiday 11 years, 4 months ago.

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  • #5026

    I have someone an RB who wants to find a seller and come in with 0 money down. any ideas how this could work? no money for contingency fund or closing costs.

    #26592
    Avatar of mtnwizard49
    mtnwizard49
    Member

    Why would you even consider this? What is your plan? Your exit strategy?

    #26593

    I am not considering it specifically just in general could it work has anyone had it work?
    I am still learning the perameters of this great vehicle

    If it doesn’t work, no problem …. next.

    I have just heard it might be under the right circumstances.

    #26594
    Avatar of areyes
    areyes
    Member

    give and take. if they have no money for closing costs, bump up the monthly cash flow big time to make up for the up front profits. you can either pay the trust fees yourself, or the seller can pay it, or a 3rd party investor. you can take other personal property and file a UCC1 form against it and collateralize it. its very risky when someone doesnt have skin in the game. just keep them in your database and tell them to refer you other RBs so they can build up their contribution by having them work for you.

    #26595
    Avatar of scott_l._moyes
    scott_l._moyes
    Participant

    @cynthiaholiday wrote:

    has anyone had it work?

    NO

    #26596
    Avatar of joecain
    joecain
    Member

    Hi Cynthia -

    Scott’s “NO” might come across a bit harsh, but the spirit of his “NO” is extremely well-intentioned. Rarely have we seen a Resident Beneficiary complete on one of these transactions without having put up the Contingency Fund and assorted other Closing Costs on their way into the deal.

    Think of it this way:

    :arrow: As the amount of money contributed by the Resident Beneficiary at the initiation of the Trust decreases, the likelihood of their eventual default and eviction from the property held in said Trust greatly increases :!:

    There may be all sorts of reasons and stories why this may occur, but that really does not matter. Historical perspective of events leads us to this conclusion. People who cannot even scrape together a couple of thousand dollars to move into “the home of their dreams” are very likely going to find a day really soon where they will not have enough funds to pay the rent.

    Do you really choose to be a business partner with that person??

    #26597

    enough said I can accept NO …no problem. BTW no does not sound harsh it sounds very real :)

    #26598
    Avatar of scott_l._moyes
    scott_l._moyes
    Participant

    @cynthiaholiday wrote:

    enough said I can accept NO …no problem. BTW no does not sound harsh it sounds very real :)

    Thanks Cynthia, I knew you’d understand. I like to keep things short, simple and to the point.

    #26599
    Avatar of dave salcido
    dave salcido
    Member

    If not the RB, who will pay for at least a minimum of one month’s rent to the contingency fund? (2 months or more sounds a whole lot better.) What is the true mentality of any serious potential occupant that can’t bring in serious cash? “Scraping up” an RB is an accident waiting to happen in my humble opinion.

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