A Real Estate Broker’s Share

But a lot of people get tricked into thinking they have to deposit at least something whenever they buy real estate, even using a simple option purchase agreement.

That is a massive misconception. Huge! So in the next couple of minutes let me show you how ordinary people like you are confidently doing safe, no money down real estate investing even in today's economic environment. Some of them are successfully dong this on their own, although this is not easy. Many others are utilizing only their good credit and provable income yet getting real estate investments that are secure, high yielding and yet are practically turn-key.

Have you heard about the highly negotiable, so-called 'sandwich' lease option?

With it, you take over the house payments and equity of someone who can't keep those payments up, but not the house ownership, by linking a revocable option to purchase agreement with a lease agreement written in your favor. The option ties up the property before you buy it, but makes it possible for you to revoke it. Almost certainly you will have to make a promise to pay, or put money or a security down at the time you sign the agreement. But with these instruments in place you can back out when you want to with no recourse except losing anything you might have put down.

Now, most people seem to think they have to write a check or put down some cash to make these options legally valid. This is not correct. Because you and the seller can make a revocable option turn on a consideration of any sort that you both agree to. It can be money. But it could equally be a promise to pay, say, part of future rentals. Or something like a car or jewelry. Anything you both write into the option.

That promise to pay is attractive ... it basically means you put nothing down right now and will only make an agreed payment once the option is exercised. People are using these promise to pay clauses right now. This is pure no money down real estate investing with the security of commercial law and requiring zero cash.

Because it is so good, it is difficult to get this written into your option to purchase. Also, sellers generally must get rid of the property but with this option you are not taking over the ownership of the home. However, when you can agree on this option you scoop up all the benefits of no money down real estate investing.

There are several things to consider before trying to strike this agreement, however. And many first-time real estate investors gloss over them.

One, you must find out why the seller has not yet sold his house? Is there something wrong with the location or the physical condition of the house itself? Are city building or zoning regulations unhelpful? If there are problems with the house, will these make it difficult for you to keep up the payments you take over?

Next, do the numbers stack up? Most people thinking for the first time about no money down real estate investing concentrate on the fact that there is no money down. Don't overlook another fact --- you might lose money if the rental market is paying less than your payments. You might lose a ton of money! Here's an example of this. Say you take over mortgage payments of $1200 a month and rental market for the property only pays $1000 a month. You will be losing from Day One.

I don't mean to highlight the negatives that are present in this form of no money down real estate investing. So let me show you anther way to get into this business. This can even be turn-key.

If you have good credit (and it is easier to have good credit than you may realize) and make over $70,000 a year, it's possible to find a program where you can purchase real estate with 100 percent financing. Again this is pure no money down real estate investing. And to make it stress-free, you just need to find a program that will take care of the variables I've mentioned.

Ideally, that program would sell you a good looking, well designed property that could definitely be rented out. The home would be refurbished and meet (or even exceed) city building codes and standards. It might even be rented to a tenant backed by a government initiative such as Section Eight. The property would come with sufficient equity to get the bank loan and make certain your future profits. And it would give you a cash flow after moorage, insurance, tax and maintenance expenses.

Sound like a turn-key dream? There are no money down real estate investing programs that deliver exactly this.

So my advice is that you keep learning about no money down real estate investing, but that you raise your expectations and only consider joining turn-key programs that genuinely require no money down at the start, take care of many of the variables, and give you a reasonable return for relatively low outgoing costs over the life of your investment.