Most sellers will want some sort of down payment so that you have “skin in the game.” But a seller may be happy with a much smaller down payment than a traditional lender would. So, don’t be afraid to ask for 3%, 5%, or 10% of the purchase price as a down payment.
You can also think creatively about what you give as a down payment. Let’s say you’re buying an expensive 30-unit apartment building. What if you own a piece of land, a truck, or a promissory note paying monthly interest? Each of those assets has a value. And the seller might perceive their value higher than you do.
Also, if the property needs a lot of repair work, don’t be afraid to negotiate your repairs as part of your skin in the game. I once negotiated a $5,000 down payment (much less than the seller wanted) because I also agreed in my contract to a long list of repairs. I already planned to do them, but it put the seller at ease knowing I was spending an additional $30,000 or more improving the security for his seller financing.
David Wyrick REALTOR /Leasing Expert