“It Didn’t Matter that I Didn’t Have a Down Payment, Otto Got Me a Loan Anyway. He’s My Mortgage Lender for Life”
Recently a client was referred to me who was thinking about buying a property but she was unsure if they could buy a home because they didn’t have much money for a down payment. They had found a newly converted condominium complex and could buy a two bedroom unit for only $395,000. The problem was that they had only enough money for the closing costs plus a little extra. The developer had an on site lender but that lender was unable to work with anything less than a 5% down payment. The down payment and the closing costs were more than this young couple had.
Because of the many different lenders I work with, I was able to find a lender who was willing to accept a 3% down payment. I showed them that they could access their 401k without a penalty in order to buy their first home. With three percent from their 401k they had enough to buy the condo.
Since real estate is such a great investment I helped them develop a plan for their wealth creation. It’s a simple plan that will lead them to a great deal of wealth. They will keep this property for the next 7-10 years. Rather than sell it at that point they will draw out some of the equity and buy their next home. Property in our part of California tends to double in value every 10 years. After 10 more years they will repeat the process by purchasing a third home and renting out the second one. They will then have two rentals and a primary home. Three assets appreciating instead of just one.
Your Mortgage Lender for Life.
PS. If you know someone who thinks they need a giant down payment to buy a home, please refer them to me. I have solutions.
PSS. The secret to investing in real estate is “buy and wait” rather than “wait to buy”