It does help to boost your career in real estate when you have money to buy an investment property for all cash. However, it’s not the only way to buy a property. There are ways in which you can purchase a property with little to no money down. If you are on a tight budget to buy a property, take a look at these ways to get started with real estate investment with no money upfront.
1. a primary rental residence.
You always have the option to choose a multifamily property normally a duplex, three plex or a four-plex as your primary residence. This process is called house hacking, where you buy a multi-unit property to live in as your primary residence while you rent out the rest of the units. This is a popular method for young and new real estate investors, to begin with, little to no money. Payment assistance programs like FHA and 203k loan offer the perfect first steps as a guide to investing.
2. Leveraging another property
If you have an excellent credit score and own another property with equity, you can use other property’s equity by getting a home equity loan. This type of financing allows for loans up to 75 to 80% of your property’s equity. For example, if you own $200,000 worth of property and owe $100,000, you can make use of $75 to $80k of your property’s equity to purchase another property.
3. Seller financing
This is not a traditional form of financing. Here, the seller himself acts as the financer, aka seller financing or owner financing. This is where the seller of the property can finance the property for the buyer. Instead of going to the bank, the buyer can finance the property he is going to buy from the seller himself. The buyer can repay the loan according to the repayment terms outlined in a formal agreement, like notes or mortgages.
4. Partner investments
This is one of the most common methods of buying an investment property with little to no money down. This is done using other people’s money. You will need to find a private lender or funding partner who will be willing to partner with you on the investment. This partner will provide you with finance to buy the property. This could be just the down payment or the entire property price in exchange for a return on their investment.
The structure of the return can be:
– A private loan, where the partner is paid a monthly payment
– A combination of steps mentioned above
You don’t always need a truckload of money to start your career in real estate investment. Most successful real estate investors use several different methods when buying an investment property. And when you need assistance with your investment, we at Perfect Real Estate Investments are always ready to help you out. Call us for a free consultation.