You've seen those hot-shot speakers on cable TV. Can you really buy real estate with nothing down?

Yes indeed.

There are several ways.

And there's no secret.

You don't need to send $299 for the special books and tapes, even if operators (I) are (/I) standing by to take your call. Any good real estate broker knows the techniques and can tell you whether a particular plan fits your circumstances.

First off, an eligible veteran can place a VA loan with no down payment, and if your credit and income warrant it, for more than $200,000. Eligibility requires a discharge that's "other than dishonorable" and either:

• two year's active duty,
• 180 days' service during a war (including the Gulf crisis), whether overseas or not, or
• six consecutive years in the reserves or National Guard.

  Next, for those with limited incomes who want to live in rural areas, the Rural Economic and Community Development Administration offers Farmers Home loans on modest properties. These aren't for farms, but for homes. Monthly payments are subsidized according to family income, and interest can be as low as one percent.

  In most states, special programs are available for first-time buyers or for investors who will help build up problem neighborhoods, and those sometimes require no down payment. Again, local brokers should have the information.

  Then -- particularly with income property, where the seller doesn't need to get the money out right away -- you can always look for a seller who will turn property over to you and hold the mortgage. And if you look really good, maybe do it with nothing down.

  It's important, though, to remember that when you buy with nothing down, you're borrowing the full purchase price. Your monthly payments will be correspondingly high. Those "successful students" on TV who boast that "by the next Thursday noon I OWNED a million dollar's worth of real estate" should really be saying "I OWED ON a million dollar's worth of real estate."

  It isn't enough just to buy property, down payment or no.

  The investor could be in trouble pretty quickly if it proved impossible to find tenants who would pay enough to cover the monthly expenses -- mortgage principal and interest, insurance, property taxes, repairs, sometimes utilities. And if the idea is to turn the property around and sell it promptly for a big profit -- how come the original owner couldn't find a buyer to pay that much?

  Yes, real estate investment is an interesting project and can be rewarding. But there are no short-cuts. To succeed you need a good real estate lawyer, an accountant, and above all, a broker who will help you.

  There are no secrets in real estate investing. Talk with local brokers until you find one who is interested in helping you reach your goal.

Published: March 4, 1999

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