Ten Entreprenuerial Mistakes

Ten Entrepreneurial Mistakes

It's hard to avoid certain mistakes, especially when you face a situation for the first time. In fact, many of the following mistakes are hard to avoid even if you're an old hand.
by Paul Lemberg

It's hard to avoid certain mistakes, especially when you face a situation for the first time. In fact, many of the following mistakes are hard to avoid even if you're an old hand. Of course, these are not the only mistakes CEOs make, but they sure are common enough. Take the following self assessment: give yourself ten points for each of these entrepreneurial blunders you are in the process of making. Deduct five points for those you have narrowly avoided. Your score, of course, will be kept confidential, but do seek help. Fast!

1. Big Customer Syndrome
If more than 50 percent of your revenues come from any one customer you may be headed for a meltdown. While it both is easier and more profitable to deal with a small number of big customers, you become quite vulnerable when one of them contributes the lion's share of your cash flow. You tend to make silly concessions to keep their business. You make special investments to handle their special requirements. And you are so busy servicing that one big account that you fail to develop additional customers and revenue streams. Then suddenly, for one reason or another, that customer goes away and your business borders on collapse.
Use that burgeoning account as both a cause for celebration and a danger signal. Always look for new business. And always seek to diversify your revenue sources.

2. Creating products in a vacuum.

You and your team have a great idea. A brilliant idea. You spend months, even years, implementing that idea. When you finally bring it to market, no one is interested. Unfortunately you were so in love with your idea you never took the time to find out if anyone else cared enough to pay money for it. You have built the classic better mousetrap.

Do not be a product searching for a market. Do the "market research" up front. Test the idea. Talk to potential customers, at least a dozen of them. Find out if anyone wants to buy it. Do this before anything else. If enough people say "yes" go ahead and build it. Better yet, sell the product at pre-release prices. Fund it in advance. If you don't get a good response, go on to the next idea.

3. Equal partnerships

Suppose you are the world's greatest salesman, but you need an operations guy to run things back at the office. Or you are a technical genius, but you need someone to find the customers. Or maybe you and a friend start the company together. In each case, you and your new partner split the company 50/50. That seems fine and fair right now, but as your personal and professional interests diverge, it is a sure recipe for disaster. Either party's veto power can stall the growth and development of your company, and neither holds enough votes to change the situation. Almost as bad is ownership split evenly among a larger number of partners, or worse, friends. Everyone has an equal vote and decisions are made by consensus. Or, worse still, unanimously. Yikes! No one has the final say, every little decision becomes a debate, and things bog down quickly.

To paraphrase Harry Truman, the buck has to stop somewhere.
Someone has to be in charge.
Make that person CEO and give them the largest ownership stake, even if it's only a little more.

51/49 works much better than 50/50.
If you and your partner must have total equality, give a one percent share to an outside advisor who becomes your tie-breaker.

4. Low prices
Some entrepreneurs think they can be the low price player in their market and make huge profits on the volume. Would you work for low wages? Why do you want to sell at low prices? Remember, gross margins pay for things like marketing and product development (and great vacation trips.) Remember, low margins = no profits = no future. So the grosser the better.
Set your prices as high as your market will bear. Even if you can sell more units and generate greater dollar volume at the lower price (which is not always the case) you may not be better off. Make sure you do all the math before you decide on a low price strategy. Figure all your incremental costs. Figure in the extra stress as well. For service companies, low price is almost never a good idea. How do you decide how high? Raise prices. Then raise them again. When customers or clients stop buying, you've gone too far.

5. Not enough capital
Check your business assumptions. The norm is optimistic sales projections, too-short product development timeframes, and unrealistically low expense forecasts. And don't forget weak competitors. Regardless of the cause, many businesses are simply undercapitalized. Even mature companies often do not have the cash reserves to weather a downturn.
Be conservative in all your projections. Make sure you have at least as much capital as you need to make it through the sales cycle, or until the next planned round of funding. Or lower your burn rate so that you do.

6. Out of Focus
If yours is like most companies, you have neither the time nor the people to pursue every interesting opportunity. But many entrepreneurs - hungry for cash and thinking more is always better - feel the need to seize every piece of business dangled in front of them, instead of focusing on their core product, service, market, distribution channel. Spreading yourself too thin results in sub-par performance.

Concentrating your attention in a limited area leads to better-than-average results, almost always surpassing the profits generated from diversification. Al Reis, of Positioning fame, wrote a book that covers just this subject. It's called Focus.

There are so many good ideas in the world, your job is to pick only the ones which provide superior returns in your focus area. Don't spread yourself thin. Get known in your niche for the thing you do best, and do that exceedingly well.

7. First class and infrastructure crazy
Many a startup dies an untimely death from excessive overhead. Keep your digs humble and your furniture cheap. Your management team should earn the bulk of their compensation when the profits roll in, not before. The best entrepreneurs know how to stretch their cash and use it for key business-building processes like product development, sales and marketing. Skip that fancy phone system unless it really saves time and helps make more sales. Spend all the money really necessary to achieve your objectives. Ask the question, will there be a sufficient return on this expenditure? Everything else is overhead.

8. Perfection-itis
This disease is often found in engineers who won't release products until they are absolutely perfect. Remember the 80/20 rule? Following this rule to its logical conclusion, finishing the last 20 percent of the last 20 percent could cost you more than you spent on the rest of the project. When it comes to product development, Zeno's paradox rules. Perfection is unattainable and very costly at that. Plus, while you getting it right, the market is changing right out from under you. On top of that, your customers put off purchasing your existing products waiting for the next new thing to roll out your doors.

The antidote? Focus on creating a market-beating product within the allotted time. Set a deadline and build a product development plan to match. Know when you have to stop development to make a delivery date. When your time's up, it's up. Release your product.

9. No clear return on investment
Can you articulate the return which comes from purchasing your product or service? How much additional business will it generate for your customer? How much money will they save? What? You say it's too hard to quantify? There are too many intangibles? If it's too difficult for you to figure, what do you expect your prospect to do? Do the analysis. Talk to your customers, create case studies. Come up with ways to quantify the benefits. If you can't justify the purchase, don't expect your customer will. If you can demonstrate the great return on investment your product provides, sales are a slam dunk.

10. Not admitting your mistakes.
Of all the mistakes, this might be the biggest. At some point you realize the awful truth: you have made a mistake. Admit it quick. Redress the situation. If not, that mistake will get bigger, and bigger, and... Sometimes this is hard, but, believe me, bankruptcy is harder.
Assume your costs are sunk. Your money is lost. There is good news: your basis is zero. From this perspective, would you invest fresh money in this idea? If the answer is no, walk away. Change course. Whatever. But do not throw any more good money after bad.
OK, everybody makes mistakes. Just try to catch them quickly, before they kill your company.
To avoid some mistakes in the future, it sometimes helps to ask good questions ahead of time. Click the link if you would like a copy of my fractal strategic planning questionnaire.


About The Author:
Business Coach http://www.paullemberg.com/ , Paul Lemberg is the President of Quantum Growth Coaching, the world's only fully systemized http://www.quantumgrowthcoaching.com/ program designed to rapidly create More Profits and More Life for entrepreneurs.
March 2006

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The New York Foreclosure Process

The New York Foreclosure Process
Judicial foreclosure (foreclosure by lawsuit) is the primary method of foreclosure in New York. Although non-judicial foreclosure is available, it is seldom used. Non-judicial foreclosure procedures are so complicated that they often lead to title disputes. Such problems might make it very difficult to evict a tenant. Junior lien holders might also dispute the title and tie the matter up in litigation. Thus most lenders will elect a judicial foreclosure.
The Lis Pendens
Judicial foreclosure begins when the lender files a lawsuit. The lender will sue the borrower and any person who has a claim to the ownership or a possession interest. The lender, as plaintiff, has a summons and a complaint served on the borrower. The summons commands the borrower to come to court and answer the lender's complaint. This complaint describes the lender's legal and factual basis for foreclosure.
A notice of Lis Pendens must be filed. The Lis Pendens is a notice that a lawsuit is pending, the outcome of which affects title. (You may access all the newly recorded Lis Pendens properties in the Nine (9) Major Metropolitan New York counties when you become an Active Member. Click here for more information.)
Often, the borrower fails to answer. In that event, the court will appoint a referee to compute a figure for the foreclosure. The court may then sign a judgment of foreclosure and sale. If the borrower appears and defends against the lawsuit, then the court will determine the merits of the defense. The referee will need an oral hearing. If the lender wins, then a judgment of foreclosure and sale will be awarded.
The Foreclosure Sale (Auction)
On average, it takes 12-18 months after a Lis Pendens has been filed for a foreclosure action to move through the court system and the property to end up on the auction block. During this time you can contact the homeowner directly to acquire the property.
Typically the foreclosure sale is advertised for 4 to 6 weeks. The sale is made by public auction to the highest bidder. (You may access all the upcoming Foreclosure auction properties in the Nine (9) Major Metropolitan New York counties when you become an Active Member. Click here for more information.)
At the auction, the successfully bidder is required to make a 10% down payment (usually in a certified check made payable to the referee) and must close within 30 days. Should the successful bidder fail to close within 30 days they forfeit their 10% down payment.
The lender may bid, as well. The lender must distribute the proceeds according to the terms of the judgment signed by the judge. The referee will normally hold any surplus money.
After the Foreclosure Sale (Auction)
If no one at the auction bids the lender's upset price (also known as minimum bid) the property reverts back to the lender. The referee executes a deed conveying ownership of the property back to the lender. The property then becomes part of the lender's inventory of homes, and is referred to as an R.E.O. (Real Estate Owned). Most lenders then farm their inventory of homes out to local real estate brokers for sale. Click here to gain access to all R.E.O. properties in your area.
Deficiency
If the mortgage contains an express covenant to pay, then the lender may seek a deficiency judgment against the borrower if the court ordered sale does not produce sufficient funds. The lender can ask the court for a deficiency judgment for the amount left unpaid after the foreclosure sale. The motion for the deficiency judgment must be made within 90 days after the foreclosure sale. The court must determine the market value and credit the greater of the market value or the foreclosure sales price against what remains unpaid on the loan.
Redemption
After the judicial foreclosure, there is no redemption period. This is true of non-judicial foreclosure, as well.
State Law Links:
STATE LAWS:

1. Action to Foreclose a MortgageArticle 13; Real Property Actions and Proceedings Law


2. Foreclosure of Mortgage by AdvertisementArticle 14; Real Property Actions and Proceedings Law

How to Wholesale for Quick Profits

How To Wholesale Your Property

This section is designed to teach you how to creatively market and sell a property as well as give you some basic knowledge on how you can help buyers.

As you begin working in this field, you will learn more and more creative ways to make money.

We also want to teach you other ways to begin working in this
industry with little or no capital.

What Is Wholeselling/Flipping
To “wholesale or flip” a property is to assign the contract to another
buyer who will close the transaction in your place.

First, you have to have a contract that is assignable;

next, add your fee to the contract amount;

and then you assign the contract to the person who will close in your place.

By tying up the property, assigning the contract, making the spread in the middle, never owning the property, you flipped or wholesaled the property.

Many investors only flip properties because it is a paper shuffle that requires the least investment.

In certain areas investors refer to the process as“wholeselling” and in other areas they refer to it as “flipping”.

Regardless of which term you use, the bottom line is the same…big
bucks from the property you don’t own!!!

Wholeselling is a personal favorite of many investors, it is an easy
hassle-free way to earn a very good living.

If you have zero cash, this is the best way to get started.

You don’t have to qualify for a mortgage; it is basically risk-free and there is no rehab money required. All you have to do is find a buyer, which is relatively easy.

How To Wholesale

Step One: Find a property with enough equity for you to make a
small profit and for a new owner/investor to walk-in with equity.

Start by making offers or placing an ad under the section in the
newspaper entitled “Real Estate Wanted”.

We will give you some sample ads that have worked for us.

Remember, if you receive a call from a distressed owner and there is not enough equity to flip the property, use one of the other methods we have discussed.

Do not let a potential seller go without trying to work out a solution. There are many ways to make money in this business.

Sample Ads:
“Need Help? Top dollar for distressed or handyman specials 555-5555”

“Distress Consultant, confidential, caring, cash 555-5555”


“Top dollar for distressed, creampuffs, upside-down, close today 555-5555”

“Tired of bill collectors? We have cash for your home, fast closing. 555-5555”

“Money to lend, top dollar for distressed properties or second mtgs 555-5555”

Step Two: Take the calls.

Since these calls are from homeowners with distressed properties, take a contractor or whoever is going to do your rehab work with you to look at these properties. It is important to be able to sign a contract on the spot.

Homeowners in distress will call every ad and they will usually sign a contract with the first person to show up and make them a reasonable offer.


Below is a sample script to use when taking these calls:
Name: _________________________
Phone#: _________________________
Where is your property located? _______________________
_______________________________________________.
What do you think your property is worth? $_______________
What will it appraise at? $_____________________
What is the balance owed? $_____________________
What is the condition of your property? _______________
_______________________________________________.
What sales price do you have in mind? _________________
Are the payments current? ____________________
End of Script.
******************************************************

Don’t be intimidated to ask these questions; remember, they called
you. Keep in mind that many investors run ads similar to these, so
you need to view the properties as soon as possible.

Homeowners in distress are not only calling you ad, they are calling all of them. Your competitor will want the same property if it is a good deal, so be quick!

Step Three: Negotiate a deal and put it in writing.

For example, let’s say the owners owe $35,000 on their property, and they need $2,000 to be able to move and pay deposits for their new place.

Make an offer of $37,000.

Note that distressed homeowners are generally willing to take very little compensation. The house is worth $65,000 in good condition, but needs approximately $7,000 to $10,000 in repairs.

There is approximately a $28,000 difference (spread) between your
purchase price and the estimated market value of the property.

Decide what you want to make as your assignment fee, for example,
$4,000.

You will add $4,000 to your contract price, which is $37,000, and ask $41,000 for the property.

The new buyer will be “in the property” with $24,000 in equity. Once the repairs are done, assuming rehab and cost of money was $10,000 (or less). Your buyer will make approximately $14,000. The original owner made his $2,000, you made $4,000, and the person who actually did all the work and took the risk made $14,000.

Everyone is happy. Win/win!

Your assignment fee is at your discretion.

There is no set amount that investors charge.

The key to putting together a good deal is for the seller to have some moving money, for you to get a small assignment fee, and the bulk of the profit going to the person taking the risk, your buyer.

If a buyer rehabs a house and only makes $5,000 when he thought he would make $10,000, he will feel bad about the deal and probably not buy any more houses from you. Believe us, it is better to make a small amount and flip a lot of houses than to make a larger amount and only flip a few.

Other investors will find out you “tack on” too much money and it will become difficult to flip your properties.

There is no need for greed; remember, you are supposed to be giving“wholesale” prices.

When preparing the contract, it is imperative to write in the words
“and/or Assigns” following your name.

This is what allows another buyer to close in your place. You have to leave a deposit when you sign the contract, as consideration is necessary to make a contract binding.

We typically leave a $100 deposit.

This way, if we are unable to flip the property, we are not out a lot of money.

Allow as many days as possible for closing (try to get at least 60 days), keeping in mind that the seller may have limited time to be out, and you will need time to find another buyer who may need time to arrange financing.

Have your attorney prepare an “Assignment of Contract” form to use when you find a buyer to assign this deal to.

You must let the owner know that you need access to the house.

This will allow you to be able to show it to potential buyers.


Step Four: Finding another buyer.

Place another ad in the newspaper under “Houses for Sale”.

Sample Ads:
“Handyman Special- CHEAP, CASH 555-5555”

“Investor delight, $1,000s below market, make offer 555-5555”

“3/2/1 handy! $20,000 below market, must sell 555-5555”

“Light handyman special, cosmetic only, great starter home, $1,000s below market 555-5555”

You will begin to receive many calls.

When you give details about the property, state an asking price a few thousand dollars higher than what you are willing to accept to allow room for negotiation. Let potential buyers drive by the property and make their own assumptions as to the cost of repairs, while making them aware that the repaired market value is $65,000. Explain how this will put them
“in the house” for a great deal.
Build a list from these callers to use in the future when flipping or
selling another property. Callers will range from investors to potential homeowners looking for a good deal. You will make more money selling to an end-user (homeowner) than to an investor; however, if the home is in very poor condition, it may not pass a lender’s inspections. If the buyers don’t have cash, you may not be able to put the deal together. Selling to an investor will ensure a quicker closing with less hassle.

Sample Investor List:
Name: ___________________________
Phone #: ___________________________
Are you confined to any area? ______________________
Can you close with cash immediately? _______________
Can I call you in the future with good deals? _______________
What is your price range? _____________________
Okay, (name) this particular property is located at ____________.
You should go right away and look at it. Based on the number of calls I have had so far, it won’t last long. It is 1st come, 1st served. If you don’t end up with this particular piece of property, I will call you with the next one. Okay, Great…
If you have a fax #, I will fax information on my next deal.
Fax #: __________________

End of Script



Step Five: Negotiate a deal with the new buyer and prepare the
Assignment of Contract.

Be aware that if this buyer does not close, you are expected to and will forfeit your deposit if you cannot close. If for any reason your buyer backs out, ask the seller for an extension. In order to receive the extension, be willing to compensate the seller for it by making a mortgage payment, etc. We find that if we get a $3,000 deposit from our buyer, it deters backing out. Not many people will
walk away from a deposit of that size.

As you get to know other investors, you will learn who follows through and who does not.


When you “assign a contract”, be aware that the assignee will see the contract for sale and purchase showing the actual sale price. If this makes you uncomfortable, the alternative is to prepare a contract for sale and purchase with your buyer and perform a double closing.

If a double closing is the route you choose to take, the contract for
sale and purchase should state your name as Seller and you buyer as
Buyer, with a closing date matching the closing date on the contract
between you and the owners.

It must also have a contingency included releasing you from the contract if you do not close on the first transaction.

Otherwise, you will be bound to a transaction in which you are never empowered to transfer ownership. An assignment of contract can be signed at the closing because at this point the sale will probably take place regardless of whether your buyer sees what you really paid.

If both contacts are to be performed on, a double closing will take
place.

This is when you and the seller sign the requisite documents (close), and then you and your buyer sign the requisite documents (close), and with the help of the closing agent, the money from your buyer will close the deal with your seller.

For example:
Assigning the contract nets you the most money. You assign the
contract your buyer shows up for closing, you sit in as a “spectator”
and watch the closing take place, then walk away with a $4,000 minus the closing costs incurred for becoming the owner for a brief
period.

Don’t allow the sellers to walk away with nothing as it will leave them feeling bad about the deal; remember, always try and create a
win/win situation.

If you are unable to find another investor or end-user to purchase the property, you have a couple of choices:

first, to walk away and lose your deposit; or secondly, to find the money and rehab the house yourself. Investors don’t usually put up a big deposit with the homeowners, so losing a deposit is not a big deal. It’s the fact that the distressed owners were counting on you and you have let them down, and now they are probably worse off than they were. If you are not certain you can flip a property, then don’t tie it up!!!

You can always look for a buyer first, then go back to the homeowners to see if the property is still for sale. Given the distressed situation, there is a good chance that it will be.

Learning about Contractors - Builders with Real Estate Investing

Learning about Contractors - Builders with Real Estate Investing GOOD LUCK!!! You will need luck with Contractors in the REI Business! Unfortunately, a few contractors have earned a bad reputation for ripping people off. Naturally, not all contractors are dishonest. Once you find contractors with whom you would like to work, be sure to visit their projects (completed and uncompleted) and check to be sure they are licensed and insured. Contractors are licensed individuals able to perform work, whether by their own crew or by subcontractors (including pulling permits), to property owned by others. Contractors generally hire subcontractors to perform the work that they are hired to do. A subcontractor is a contractor licensed in a specified field, such as a plumber, a roofer, an electrician, a carpet layer, a painter, or similar building professional. Contractors are paid by the seller and make their money by charging the seller more than they are paying the subcontractor to perform the work. For example, if you hire a contractor to replace your roof, he/she will call a roofer for an estimate. The roofer may give an estimate of $5,000 to the contractor, and the contractor will give you (his client) an estimate of $7,000 for the same work. Obviously, you will save money by cutting out the middleman. It is a good idea to learn the cost of materials and supplies. You can accomplish this by visiting your local home improvement center. These stores usually offer free classes teaching how to do many repairs. The benefit of learning about cost is that you can figure out how much you are being charged for labor. Remember, all estimates are negotiable. Don’t rule out the local “handyman” if the work you need to complete does not require a permit. In other words, most cosmetic repairs can be done by you or anyone with experience repairing minor problems. Be sure not to pay anyone up-front or in full for incomplete work! Until we develop a great relationship with a contractor, we do not pay anything up-front. Instead, we pay “in draws”. For example, when a job estimate is $4000, regardless of the estimated length of time for completion, we pay the contractor approximately $1,000 upon providing receipts of such an expenditure. In addition, we inspect the property to be sure the receipts cover work to our project. One of the reasons we disburse in this manner is to ensure better workmanship. We find that if we pay workers up-front, their incentive to finish the job in a timely manner and perform a good job is diminished. When the contractor says the job is finished, go through your list before making the final payment. When you inspect the property, you may find a few items you want finished or changed. Reserve the final payment until the list is completed. We find it difficult to get contractors to come back to finish small items once they have been paid. We also want the work completed quickly so that our holding costs are lower. We put a clause in the contractor agreements stating that if they don’t finish by a certain date, we will begin deducting $100 (or any agreed upon figure) per day from our balance until they are completely finished. Likewise, if the job is finished by a certain date, we may offer an incentive. It is possible to “partner up” with a contractor or handyman. For example, offer the contractor a bonus to complete the repairs, including materials, and wait until the property sells and closes before receiving full payment. Or, offer a portion of payment now and the balance, including a bonus, at the closing. It is possible to have the closing agent issue the contractor a check directly from the proceeds of the sale. This might be an incentive for the contractor to finish quickly and perform better work. The purpose of the “partnership” is to save on out-of-pocket expenses now. As you begin buying and selling more than one property at a time, you may want to hire additional contractors. Don’t get exasperated, because like other investors and ourselves, you will go through many contractors!

No Money Down - The path to home ownership doesn't have to be paved in gold

Learn REI Secrets and Techniques At http://www.NewYorkREI.com, we focus on Motivated Sellers, Tenant Buyers and Private Lenders for our purchases. Come visit us!http://www.NewYorkREI.com Learn Real Estate Investing Secrets
Get Tenant Buyers and Wholesale Buyers
Find Private Money Lenders for Your Deals!

No Money Down - The path to home ownership doesn’t have to be paved in gold Most first-time homebuyers share the same problem. They don’t have enough accumulated savings to make a hefty down payment for the purchase of a house. And it doesn’t seem entirely fair, especially to those who have worked hard to create and maintain good credit. As housing prices doubled in recent years, wages remained relatively stagnant, and a growing number of people found themselves locked out of their own potential homes because of a lack of available savings. A 20% (or greater) outlay of cash at closing is common, and can be a tremendous obstacle to overcome, even if interest rates on mortgages remain relatively attractive. But there are alternative strategies to help get around the problem, and for many the “no money down” option is an increasingly viable solution. According to the National Association of Realtors, over 43% of first-time homebuyers financed the entire cost of their home. Others paid anywhere from as little as 5% to 1% down. So you may be closer to the closing table than you imagined, especially if you engage the help of an experienced and creative mortgage lender who thinks outside the box to get you into a workable loan package. Here are some popular ways it’s done: Secure a loan that also pays your closing costs With excellent credit you may qualify for loans over and above the price of the property you’re buying. Some lenders offer loans of up to 104 or 107 percent of the selling price, to provide enough excess funds to pay all of your closing costs. Because the lender considers you a low risk borrower thanks to your high credit rating, they view this kind of loan as increased business for themselves, while it offers an added ease and convenience for you. Apply for two separate loans that are used in tandem to cover 100% Ask your mortgage lender about so-called “80/20” or “piggyback” loans. This type of loan is actually two loans packaged together to help you buy with no money down. One of the loans works in a conventional way, and is for 80% of the purchase price. The 2nd part of the loan is a smaller 20 % loan issued simultaneously. In effect, the lender is letting you borrow your 20% down payment. You can expect to pay higher rates on the down payment portion of the loan, but you get to buy a house with the “piggyback” plan, rather than the “break open the piggy bank” plan. Do you qualify for special loans? The US Department of Housing and Urban Development can provide you with information about state and local government loan programs or loans available through non-profit organizations. Check them out, but if you find a loan that fits your circumstances, don’t delay – sometimes the loan funds are budgeted and dispersed on a “first come, first served” basis and then they run out until the next fiscal year. And if you have served in the US Military, you may be eligible for a no-money-down (or low money down) Veterans Affairs loan. Down payment funds from gifts or retirement accounts Some loan programs permit you to use funds that are a gift from a family member for your down payment. The lender will follow procedures and use a “paper trail” to ensure that your family member isn’t just temporarily parking some money in your account, and that it really represents a no-strings-attached legitimate and permanent gift. There are also lenders willing to make the same concession for gifts from a domestic partner or even from a non-profit organization. You can also tap into your retirement account as a way to get down payment money. There are specific guidelines and stipulations, so consult a tax professional to find out exactly how to do it. But most 401 (k) plans allow you to borrow as much as $50,000, as long as you have enough funds leftover in the account to meet certain criteria. Flexible owner financing Sometimes a seller doing self-financing will pay your closing costs, to help you close the transaction. And if you use a “lease purchase” contract, you may be able to negotiate it so that the landlord/seller lets you apply monthly lease payments toward the purchase price until enough money has changed hands to compensate for the down payment. Ask your mortgage representative to help you decipher all the available options. Because real estate prices have skyrocketed, mortgage lenders have become more creative to meet the need for consumer-friendly loan packages. During the hot Japanese bull market of the 1980s, banks in Tokyo began writing mortgages with payments stretched out over lifetimes. A conventional 30-year loan became a 99-year loan, in order to help people manage the payments on humongous mortgages. We don’t expect to see those kinds of amortization schedules offered in the USA anytime soon, but we do see opportunities for first-time buyers to secure solid and reliable “zero-down” mortgages.