As you probably already know, the decision to begin real estate investing can be very profitable! But in order to reach the point of bringing in the cash, you often have to make a down payment. Alas! This isn’t always the case! If you are strapped for cash but want to get into real estate investing, there is a way to find success with no money down real estate investing!
Consider any of these options, from borrowing to other avenues of financing without down payments, to start real estate investing when you cannot otherwise afford it!
Borrow to Start Real Estate Investing
When wondering how to start real estate investing with no money down (or little money), consider any of these creative ways to get your foot in the field.
1. Take out a home equity loan
A bank will often work out a loan with you that will enable you to take out a down payment based on the mortgage loan you have on your house. This would essential be a second mortgage or a line of credit that goes against your home for collateral. Be sure to keep your eyes peeled for a low interest rate in order to make this option the most economical.
2. Borrow money
Consider asking family or friends to help you by investing in your new venture. Offer them a percentage back for their generosity.
3. Contact a micro lender
A micro lending service can help you to find a lender for a smaller loan.
Other Options For No Money Down Real Estate Investing
1. Seek out seller financing
Occasionally, a seller might give a loan in order to make the process of purchasing easier. You would generally make monthly payments that are a bit higher than usual in order to make up for the lack of down payment. You will need a real estate attorney to draw up paperwork to make sure both sides of the deal are protected.
2. Lease with the option to buy
Another option is to make payments for a lease agreement. You would do this until you have the money to buy. A percentage of the payments you make would be applied toward the price of the property.
3. Take over mortgage
A great (but less common option) for how to start real estate investing with no money is to take over the mortgage payments. In turn, you would receive the deed. Some negotiating is required here and some mortgage loans actually have wording in the documents that prevents this sort of agreement from occurring.
Another no money down approach to real estate is to co-invest. In order to make this work for you to start real estate investing with no money, you could seek out a partner who can help to fund so you can start real estate investing. A contract will be vital and it would be wise to contact an attorney to help with this to ensure who retains control over the property (this helps ensure that the person funding you doesn’t take it out from under you).
Any of the above methods are excellent options for how to start real estate investing with no money down. Best of luck to you!