Many people would love to take advantage of the great return on investment in real estate but they don’t have a big chunk of cash for the down payment. But sometimes your desire can be enough. You just need to look for the right property and the right seller who is willing to work with you. Not every seller will accept these terms or even understand them but a motivated seller will see that this solution will be great for both of you.

First, think about the type of seller that you will need to find. In many cases a homeowner who is in pre-foreclosure is the perfect match for this plan. They have fallen behind on their mortgage payments and are about to lose their home. If they have equity built up, it is about to be lost to them. Your offer to them is to assume their loan. You would need to contact the lender and be approved by them to take over the terms of the existing loan. You would also need to catch up the payments that the original borrower had missed. If the original owner has a great deal of equity, then they might hope to recover some of that from you in the form of cash. You can accomplish this by taking out a second mortgage in the amount of the cash that the seller wants. In the end you are not financing the full value of the home and should be able to secure the two loans against the value of the property.

When you are negotiating the amount of cash that the seller wants, remind them that you are helping them to avoid a foreclosure and a huge hit to their credit rating. That needs to have some cash value to them as well. They must understand that you cannot finance the entire value of the home and they should be happy only losing part of the equity they had established. If they ask for too much cash, then you need to walk away and find a more agreeable seller who will appreciate the opportunity to avoid crippling their credit rating and recouping some of their equity.

If you are unable to assume the original loan, then you might want to consider getting a conventional loan on the property if the seller would consider taking less for the house. Being in a distressed or very time sensitive situation, the seller might be willing to settle for 60-70% of the market value of the house if that is enough to cover the outstanding portion of their mortgage. They might even end up walking away with a small amount of cash after paying the mortgage. But clearly, finding the right distressed seller is a great opportunity for you to purchase real estate with no money down. Visit to learn more about purchasing distressed properties and how a real estate professional can help you find a great real estate investment.