health-care professionals, lawyers, realtors, insurance agents, car dealers, and merchants – all of these can provide valuable services or discounts that could be used in place of down payments. The potential list is not restricted to professional consideration either, sometimes a supply of plain elbow grease can help swing a deal in the absence of funds.

One beginning investor we know of was able to assume a seller’s obligations and work off part of the debt by providing maintenance and management services for the creditor. As a result he picked up his first investment.

For example, a Eugene, Oregon, investor recently put together a deal on a duplex by taking the property “subject to” the existing first, having the seller carry back a sizeable second for five years, and generating the $8,000 down payment by borrowing it from the cash value of his insurance policy at 5% interest. Another investor in San Jose, California, set up a transaction involving a $57,500 single family house by assuming the existing first of $25,400, planning to put on a hard-money second in the amount of $20,000, and having the sellers carry back the rest in the form of a third. However, when he went to put on the second, the lenders required him to come up with 10% down in the form of cash. He solved this problem by going to the cash value of his life insurance policy and borrowing $5,800 at 5% interest. The amount needed from the hard-money second was now only $14,200, and everyone was happy. The beauty of insurance loans of this type is that the principal need not ever be paid back (except out of the death or annuity benefits of the policy).

Technique No. 14 Anything Goes

Down payments need not be in the form of cash. We have already seen how professional services can be used in lieu of cash. The same is true of personal property that the buyer might offer the seller to satisfy down payment needs. Cars, boats, furniture, art, clothing, musical instruments – anything acceptable to the seller might be used.