But what if local property values – particularly during a period of sustained high interest rates and sluggish real estate sales – do not grow as anticipated? The buyer may be forced to sell the property, or another piece of real estate in his control to pay off the balloon. Alternately, he may have to bring in an equity-participation cash-partner to bail him out, thus giving away important benefits. In the worst case, he might have to give the property back to the seller and lose all his investment.

Despite its liabilities, the balloon payment technique can be a valuable way to get into a property for little or nothing down up front. Buyers should resist pressures to accept anything less than five years for payout seven years or more would be preferable.

Technique No. 7 High Monthly Down Payments

This technique is a variation of Technique No. 4, “Contract or Wrap-Around Mortgage”. Usually a contract sale requires at least a token down payment to substantiate the good faith of the buyer and put a little cash into the pocket of the seller. Sometimes a hefty down payment is required, in which cases funds have to be “cranked” out of the property (Techniques 32 and 33) or a cash partner must be brought in (Techniques 43, 44, and 45).

But what if the buyer has nothing at all to put down except an income that gives him the ability to make monthly payments of several hundred dollars toward the purchase of a piece of property? Perhaps the seller would permit him to purchase the property now and make high monthly payments over a couple of years until a mutually acceptable down payment had been constitute. It never hurts to ask.

Technique No. 8 Defer the Down Payment with No Mortgage Payment

There are endless variations of how seller financing might be set up. Here is one more, which could prove useful under certain circumstances. A seller of a free and clear property who needed cash down only to build trust in his buyer might be induced to forego rental income for a few months while the buyer accumulated enough to put together the required down. It is not a common opportunity. But it has happened in the past and will happen again in the future – perhaps to you.

This technique, together with the other seven described and illustrated in this section, should stimulate creative buyers to take