Is it possible to buy a landed property with no money down?

Heard a "wealth guru" claimed that he bought a landed property without paying the seller any money.
The story goes something like this: buyer "wealth guru" signed a contract with the seller but did not put in even a down payment. After two years, when the time for handover, buyer went to bank to take a loan. Since the value had appreciated, the loan was able to cover the entire selling price.

Really? Not even a down payment or even an option to purchase? Is this story too good to be true?

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Ryan Ong

24 Nov 2020

Partner at Stacked Homes

To purchase a residential property with a bank loan, the first five per cent must always be in cash (the next 20 per cent can come from any combination of cash or CPF).

The maximum amount of financing - assuming you have no oustanding home loans, meet age and loan tenure limits, and qualify for the full Loan To Value (LTV) ratio - is currently 75 per cent.

There are many variants of the "no money down concept", which have appeared in seminars, talks, conceptual discussions, etc. over the years. However, most of them revolve around the same concept: have someone else invest with you, and ask them to pay the minimum cash down (with whatever powers of persuasion you have). Maybe they'll get a bigger cut of the returns when you sell the property in 10 years, get more of the rental returns, etc.

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