
How I bought a rental property for $0 down
I used to think this was impossible, and people doing it were "special"
In the last edition of The Leonard Letter, I asked ya’ll how frequently you wanted to hear from me. To the hundreds of you who responded — thank you.
The majority of people said C or D, which was every day or whenever I could, quite a few said A, which was three times a week, and some people said B, which was 1-2 times per week.
That said, I am going to shoot for 2-3 per week, but it will likely fluctuate and be similar to “whenever I can”. Try to think of it as a new form of “social media”. Rather than posting this information on social media, I will be crafting it as this newsletter.
Now, let’s get into the main content for this edition of The Leonard Letter.
If I think back about a year or two ago, I remember hearing about these people buying real estate deals for low or no money down on podcasts and thinking to myself, “there’s just no way that’s possible for me. It can’t be. They must be special. They must know something I don’t.”
I thought like that for a while, until now.
I just bought a rental property for $0 down.
Yes, really.
Me and my business partner. No special skills, no special knowledge, nothing special about us, but we did it.
I finally realize it is actually possible for everyday people.
Here’s how we did it.
As you may, or may not, know, I am from New Hampshire and I buy all of my rental properties in Texas, long-distance (note: I’ve never been to this city or seen any of the properties, either!).
My business partner, Ryan, had come across a property that had just hit the MLS. He sent it to me and asked me to run the numbers.
I ran the numbers. They were great as a traditional, move-in-ready rental, but I thought they’d be a solid double or triple if we were able to successfully do our first BRRRR.
I texted him back and told him what we’d buy it for. He reached out to our agent to tell him we wanted to submit an offer ASAP.
We knew there were about 40 showings scheduled, so we went in with a full-price offer at asking immediately. The seller accepted our offer right away.
With this being our first attempt at a BRRRR, we wanted to keep it very light. Remember, it could be rent-ready as is and we’d be happy to own it, but to try to learn how to BRRRR, we decided to try a “light-BRRRR”.
We are doing all new windows throughout the house and fixing some siding.
We got the property under contract, got estimates for the work, submitted the work orders to the appraiser and our lender, and awaited the appraisal.
The appraisal came back quite a bit higher than what I put in my analysis, which was a great surprise. I tend to run my numbers quite a bit conservative anyway.
When we got the appraisal back, I realized not only did it come in higher than I expected, but it meant we were going to have to put $0 in this deal.
Here’s how the numbers broke down:
The appraisal coming in higher than expected turned this deal from a single (15% down move-in ready rental) or a double/triple (3-10% down light BRRRR) to a home run (0% down light BRRRR).
The key takeaways from this are three things:
People doing these types of deals aren’t “special” and it isn’t a scam. Trust me, I used to think it was. It’s not, and it’s possible for you too.
Deals are out there, even on the MLS. Every deal I’ve bought, and continue to buy, has been directly off the MLS. Everyone else has the same access to these deals I have.
I don’t try to time the market anymore. If I find a good deal, I buy it, and I will continue to do so.
If you have any questions about this deal, you can drop them in the comments of this newsletter below, DM them to me on Instagram, or respond to this email.
All the best,
The numbers are impressive but I thought you have to put down 20-25% down on rental properties?
Do you have a property management company on the ground that you use for all your properties? If so how did you find a good company in the area to work with?