Self Help

If buying real estate with little or no cash or credit were a sure route to wealth, this country would be awash in real estate millionaires. Overall, more than 10 million people have bought various nothing-down books, tapes, videos, courses, and seminars. With all of this knowledge of creative financing floating about, you might think that the secrets of building real estate wealth were available to almost everyone.

So where’s the catch? Why have so many stepped forward, yet have so few succeeded? What’s Wrong with “Nothing Down”? To begin with, let us emphatically stress that various forms of creative financing can and should be used to finance some types of property acquisitions. In many experiences, so many of these deals crash and burn that some words of caution are in order. For without a doubt the promoters of creative financing have oversold its advantages and undersold the potential perils. Before you embark on such a journey, clearly think through the following issues:

Do You Live below Your Means? The truth about wealthy people is that self-made millionaires typically live below their means. As a rule, self-made millionaires do not drive new luxury cars, dress for success in expensive suits, spend lavishly in restaurants and hotels, wear expensive wristwatches, or display any other foolish items of status.

In contrast, far too many of those hopeful dreamers attracted to schemes of real estate creative financing have never learned to live and spend wisely. They primarily see real estate as a means to circumvent their money and credit problems - a quick and easy way to enjoy the lifestyle of the rich and famous. In fact, the promoters of “nothing down” often are shown in such luxury settings.

Take a hard look at yourself. Is your goal to sensibly pursue the inner security and confidence of a millionaire next door? Do you presently live well below your means? Do you save a large percentage of your earnings? Or, do you frequently fail to exercise financial discipline and fiscal responsibility? Do you long to show the world you’ve “made it?” Do you believe creative financing can substitute for your need to shape up your financial fitness?

If the latter personal profile describes you better than the former, you are urged to reexamine your motives and priorities. The creative finance gurus have enticed too many people to believe that, as one such promoter puts it, “nothing down can make you rich.” Wrong! Nothing down can help get you started in real estate, but only fiscal discipline can pave the way for long-term wealth and financial security.