Get the Financing after Buying Property
In the 1990s, when we traveled the country teaching real estate investors Robert Allen’s Nothing Down
seminars, we blew them away with “buy the property first, then get the financing. ”In city after city,
people in the seminar told us we could not buy real estate that way. We told them to try it our way and
report back to us what happened.
Lo and behold, from Seattle to Orlando, from Los Angeles to Baltimore, from Chicago to Dallas our
students found that they could indeed buy the property first, then get the financing! Mindset most (if
not all) residential retail buyers of real estate (home buyers) have this mindset: how much money do I
have to put down (down payment), and how much of a monthly payment can I afford (what we call the
PITI payment: Principal, Interest, Taxes, and Insurance). With this mindset, they go to a lender to get
prequalified or preapproved. What the real estate lender says determines how much of a house the
home buyer thinks he or she can afford.
Of course, being prequalified means nothing once you actually apply for a loan. Only the lenders and
agents don’t tell you this important detail. You can be prequalified for a $200,000 real estate loan and
actually wind up receiving only a $175,000 loan at closing.