Buying Real Estate Without Cash Isn't a Sure Thing for Investors. . .
"Make Money Without Money." "Learn How You Can Create Wealth." "Buy Real Estate at Below Market Value With No Money Down."</br></br>For most people, the appeal is almost irresistible: Using only borrowed money, buy properties from desperate sellers on extremely favorable terms; refinance, sell or rent them and make a killing; parlay the profits into a real-estate empire.</br></br>During the hyperinflationary 1970s, the strategy worked for some shrewd investors, and on occasion it still does. But slower rises in property values, a dearth of desperate sellers and an abundance of unrealistic techniques have rendered the strategy far from a sure thing.</br></br>In fact, for the vast majority of hopeful practitioners, no-money-down ownership is often an unattainable, but costly, dream. The money they spend on how-to seminars, books and tapes will constitute their only big-time real estate investment. "It's the same kind of thing you see with all these diet books that are being sold," says Norman Stettner, a Houston real estate investor. "Do you actually see people getting skinnier?"</br></br>Those investors who do manage to buy no-money-down properties run the risk of getting trapped in negative cash-flow situations created by poor market conditions and lower inflation. Hettie Kirkpatrick, for example, says she pays more in mortgages than she makes in rents on six properties she bought in the depressed Houston market. "The hard part hasn't been buying houses for no money down," says Ms. Kirkpatrick. "The toughest thing is keeping them after you buy."