Mr Jaiswal
Do you have any tips on:
1 - Structuring a “no money down” deal?
2 - Creating a positive cash flow situation
Thanks
Anil
 

Sunil's Answer... 

Now let’s see – point 1 – Let’s first discuss what is a "No Money Down deal" – In my book a no money down deal is where you walk out of the property transaction and have NONE of your money in the deal… there are a number of ways you can do this…. But by far the best way is to ensure that you buy a property way under market value. And then that always gives you a difference between the value and price…. How you go about using that difference is a bit beyond the scope of this reply. 

Creating cash flow positive property is paramount to building a sustainable property portfolio.  In very buoyant markets you usually find that the rents bear very little correlation to the price of a property – and in some situations I have seen the yield on a property below 3%. When finance is charged at 6,7 8 or even 10% - it becomes hard to make a positive cash flow.  In these situations you need to look beyond the “normal” letting methods and start to use your initiative.  Multi-letting (PG Accommodation) and Fully furnished Corporate lets are two good ways to increase the cash flow on a property investment. I’ve seen some multi-let properties yield in excess of 31% per annum… Now that is a FANTASTIC return on a property... and that’s not to mention the increase in price of the property over time!

Sunil