Discover the Secret of the No Money Down Strategy

Have you been racking your brain trying to figure out how to get financing for your next property investment? Now that mortgage lenders have become more stringent in their lending criteria, getting the funds for your next investment won’t be so easy anymore – at least for a little while anyway. This is where the no money down strategy comes in. With this investment technique, you will be able to rapidly build or expand your property portfolio without having to spend a fortune. Plus you can pocket thousands of pounds in profit if you buy well below market value from the outset.

With the no money down method, you won’t have to invest all your hard-earned savings so you can invest in properties. Instead private investors can lend you the money to fund your deposits. This then enables you to purchase property after property – without using your own money.

Advantages of the no money down technique

Buying investment properties using other people’s money poses a slew of benefits. The main one is that your capital is not stuck in your portfolio. This allows you to use the money more effectively elsewhere. Another advantage is that you can get the most out of your investment. Consider this example: You decide to purchase a property worth £100,000. To purchase that property, you might need to put down an initial payment of £15,000. After a year, the property’s value increases by £5,000 which means you have earned a 33% return gross on your investment. Had you put down only £1,000 your return on investment would be 400%!

The secret of the no money down strategy

If you want to be successful in the no money down business, you have to purchase properties below their market value. Below Market Value (BMV) refers to the process where you purchase a property lower than the quoted open market value then obtain a mortgage loan to enable you to buy the property from the seller for little or no money down.

With below market value, you buy the property for less than 85% of the property’s true value which is normally provided by a surveyor from the Royal Institution of Chartered Surveyors. Open bridging finance can be used to buy the property. You then immediately apply for a remortgage with your lender and subsequently receive up to 85% of the property’s open market value in advance – although you may find that you will need to wait up to six months with many lenders before you can remortgage.

How to find properties below market value

Finding and buying genuinely undervalued property is considered one of the most trying and volatile yet undoubtedly the most lucrative facet of the property business. One of the most popular ways of finding properties priced below their true market value is by locating motivated sellers. Otherwise known as desperate sellers, they will accept significantly lower than the real value of their property just to achieve a quick sale.

As a property investor, buying cheaply lets you acquire properties without having to spend a lot or any of your own money. More importantly, this means that you have built-in paper profit right from day one. If you want to learn more about the no money down tactic, buying below market value and other important aspects that lead you to acquire numerous properties using the process, you can enrol in the Property System newsletter that shows you how to purchase BMV properties.