Serving Bel Air, Benedict Canyon, Beverly Hills. Brentwood, Laurel Canyon, Los Feliz, Malibu, Pacific Palisades, Melrose, Santa Monica, Sherman Oaks, Studio City, Topanga, Canyon, Westwood & Hollywood Hills.

Name

E-mail

facebook Canyon News twitter Canyon News

Canyon News

Bel Air News

Beverly Hills News

Brentwood News

Hollywood Hills News

Laurel Canyon News

Los Angeles News

Los Feliz News

Malibu News

Melrose News

Pacific Palisades News

Santa Monica News

Sherman Oaks News

Studio City News

Topanga Canyon News

West Hollywood News

Westwood News

Woodland Hills

Celebrity News

State News

National News

World Headlines

Deaf News

Entertainment

Film

Television

Music

On the Industry

Star Gazing

St. John's Confidential File

Theatrical Musings

Life & Style

Event Listings

Tech Talk

Looking Good For Lots Less

Spirit & Creativity

Miller Time

Books

View from the Hill

NY WEST

Chrystal's Recipe Corner

Career and Life Coaching

Gardening With Tony

Life According To Lenson

Real Estate Realities

Food

Sports

Marathon Running

Keeping It Bruin: A Look Into UCLA Athletics

Baseball

Basketball

Football

Hockey

Pets

Vi's Corner

Pet Tips

Point of View

John Armor

Message to America

Critic At Large... Ruta Lee

Labor Week

Ramblings

10 Degrees Cooler

McConnors corner

Edge of the west

The Physics Wizard

Auto

Kyle's Kars

Travel

Susan Michelle's Compass

Advice

Ask Deanna

Dear Lily

Ask Oona

Features

Dancing with Earthquakes

Archives

Sports Schedules

Traveling Beyond the Canyon

Edge of the West

Law Man

Ask Us

Nathan Tabor

The Angry Economist

Truth Probe

As I See It

Columnists

Truth Conquers

The Live Wire

Notes from Exile

Letters to the Editor

Dog Training by Anthony

Canyon Mews

Speak!

Sponsors

America's Most Wanted Dogs

World Recipes

Vegetarian Lifestyle

Humor

News Briefs

Local News

Books

News

Canyon Fodder

Bad Movie Night

Critical Projection

Ed's on the Town

Fitness Quests

Flashback Films

Stories of the Strange

Gourmet Grandma

He Said/She Said

Home Matters with Yvonne

L.A. Etch-a-Sketch

L.A. Ruminations

McConnor's Corner

Mommy Minute

Musically Speaking

My Back Pages

Publisher's Pages

ResourceINK

Scene and Heard in L.A.

Silly...But Wise!

Sunset Diaries

Table Options

The Paws Cause

TV Stuff

Cartoon of the Week



Real Estate Realities

'No Money Down' Real Estate Schemes
Posted by David Rosenfeld on Jan 10, 2013 - 6:09:53 PM

LOS ANGELESI’m sometimes asked about TV infomercials touting high priced seminars that offer to teach you how to buy real estate without a down payment. My answer is generally the same: It’s an interesting idea, but it’s not something I would pursue.

House_01-13-2013.jpg

I just don’t think this is a realistic way to pursue real estate if you’re a serious buyer. Back in the 90s for instance, there wasn’t much money available in a bad economy so you could find deals where you could buy property without making a down payment or having to get financing.  It was a different time and the economy was a lot different than it is today, so some of those types of deals could be done today. But it’s not very likely.

Back in the early 90s when there was less money around in the market, the only thing people could do was do all inclusive trust deeds where they kept the current institutional financing after and the seller sold the property to the buyer who was still servicing the old loan. But the problem there was that it could become a very difficult situation should the new owner not pay the old lender.

Today, you would have a very difficult time finding anyone to agree to do anything like that. Especially in a large metropolitan area like Los Angeles. You may have a better chance in a far-flung community where the market is more impacted by the economy.

It’s easier for somebody to risk their $300,000 house than their million dollar house. So there is not that kind of market pressure and have no money down and sell a place.

What would happen back in the early 90s was that the buyer would fix up the property get new financing and/or turn around and sell the property. But today, loans have become more restrictive with these types of deals, making it harder to do them with any success.

But in terms of no money down, it’s very hard to find somebody willing to sell their property based on getting a payment from you every month. It has to be somebody you know who is willing to do this for you or someone to whom you were recommended who is willing to do it. The desperation that once existed for people to do this doesn’t exist anymore.

But what these infomercials say is that there are ways to make a deal with no money down with the property owner where he or she can finance you or they show you ways to try to raise money from investors. But in reality, people are generally very hesitant to risk money on something like this so it’s no wonder these deals are so rare.

Part of the selling points of these “no money down” seminars is the fact they offer you various ways to find financing. Among these is borrowing money from your life insurance policy. And it can be done, but you still have to ask your insurance agent “What happens if I can’t pay it back?” Like any loan, this type of loan has to be paid back sooner or later and if you can’t pay it back, it’s going to be a major problem.

Another possible scenario is asking a seller to lease the property with an option to purchase. If you’re a seller, you want to sell your property and not lease it so it’s a tall order to get a deal this way.

And there are many other things you can do without putting your own money to purchase property, but in the end, none of these are very likely to get you a deal, given today’s real estate market. In the end, you may ask yourself if someone has a secret way to buy real estate without using their own money, why don’t they keep it to themselves unless it’s not making them as much money as selling the seminars to you are? It’s an interesting question to ponder.

David Rosenfeld is a Real Estate broker and president of Advantage Real Estate, a Real Estate and investment firm in Santa Monica, and a Rotary Club member. He has more than 20 years experience in commercial and residential property investments and financial counseling. He can be reached at dr@advantage-realestate.com.



 

Cliffside Malibu

-------------------------

-------------------------

 

Serving Bel Air, Benedict Canyon, Beverly Hills. Brentwood, Laurel Canyon, Los Feliz, Malibu, Pacific Palisades, Melrose, Santa Monica, Sherman Oaks, Studio City, Topanga, Canyon, Westwood & Hollywood Hills.