Nothing down deals are common... but finding a nothing down deal that makes money can be quite tricky

A nothing down deal is one where you secure 100%+ financing - which means that you don't need to physically contribute any cash out of your own pocket.

There are two varieties of nothing down deals - genuine and re-drawn.

A genuine nothing down deal is one where the bank provides you with say 90% of the money and you arrange additional financing for the remaining 10% (plus closing costs) through a second mortgage or some other creative financing.

The re-drawn nothing down deal variety occurs when you secure 100% financing by offering additional security for the loan or by re-drawing against existing equity on another property investment.

Many off the plan "nothing down deals" properties are the re-drawn variety.

The distinction is generally not important. Instead you should remember that doing a nothing down deal will not necessarily mean you'll be able to secure a positive cashflow outcome.

In fact, because you're borrowing 100%+ of the purchase price, securing a positive cashflow return from a nothing down deal is very difficult. Not impossible... just difficult.

Want to discover some creative strategies for nothing down deals? Check out this article.