Private money lenders are the only real alternative for anybody that wishes to buy a property with little or no money. Using a traditional bank loan, you'll be asked to put up or down, depending on how you look at it, 20 percent of their cost, meaning that they may be inclined to fund 80%. However, what about fixes and closing costs? That money comes from your pocket.
You'll need to devote your capital to repairs. You understand that after the repairs have been finished, you need to have the ability to market the house but in the meantime, lots of your money is going to probably be tied up. But, with private money lenders, the image may look quite different. Many reputed private money lenders in San Francisco focus on rehabilitation funding.
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The best one provides loans for as many as 65 percent of those "after repair value". Banks never believe what the value of the house will be after you've finished the repairs. They simply consider the agreed-upon market price. Considering that the private money lender will fund 65 percent of the after repair value, you are able to fund 100 percent of the purchase price.
However, about the final costs. To be able to acquire the closing prices financed, you have to subtract them from your primary offer. Mostly, a very motivated seller will do just about anything to escape their mortgage. So, you have the loan, you paid the vendor, the seller paid the closing costs and you also spent none of your capital.
So, with the help of private money lenders, you can purchase a home with "no money down".