Читать книгу Home Buying Kit For Dummies - Eric Tyson - Страница 66

More than a few books written by (and high-priced seminars led by) real estate “gurus” claim that not only can you buy property with no money down but also that you can make piles of money doing so. A generation ago, this way of thinking was popularized by Robert Allen in his book Nothing Down.

Allen says that the key to buying property with no money down is to find a seller who’s a don’t-wanter — that is, someone who “will do anything to get rid of his property.” Why would someone be that desperate? Well, perhaps the person is in financial trouble because of a job loss, an overextension of credit, or a major illness.

Perhaps when more people used to live in smaller, tight-knit communities where everyone supported one another, this type of vulture capitalism may not have flourished. But in these times, Allen says, a don’t-wanter can offer you the most favorable mortgage terms, such as a low down payment and interest rate.

How do you find such downtrodden souls who are just waiting for you to take advantage of them? According to Allen’s estimates, 10 percent of the sellers in the real estate market are don’t-wanters. Simply call people who have property listed for sale in the newspaper, or place ads yourself saying that you’ll buy in a hurry.

In our experience, finding homes that can be bought with no money down isn’t easy to do. If you can find such a desperate seller, be aware that the property may have major flaws. If the property were a good one, logic dictates that the seller wouldn’t have to sell under such lousy terms. Should you have the patience to hunt around and sift through perhaps hundreds of properties to find a good one available with seller financing at no money down, be our guest. Just don’t expect the task to be easy or all that lucrative. Better to look for good properties and low-down-payment lender financing and to start saving a healthy down payment so you can qualify for a better loan.

Investing down-payment money in stocks is a dangerous strategy. Your expected home purchase may be delayed for years due to a sinking investment portfolio. Stocks are a generally inappropriate investment for down-payment money you expect to tap within the next five years. More aggressive individual stocks should have an even longer time horizon — ideally, seven to ten or more years. Consider what happened to the home-buying dreams of folks who foolishly parked their home-down-payment money in the stock market before and during the severe stock market decline of the early 2000s and the steep decline of 2007–08.