How to Buy Real Estate With No Money?
Learn how to buy real estate with no money and fewer resources.
Buying real estate costs money, but it doesn’t have to be that way. Your creativity, experience, and resources are wonderful assets. Knowing the real estate game is the only way to make money in this industry.
With experience, you can turn nothing into millions.
Without this knowledge, it’s easier to lose millions into this bargain industry.
People ask us, how they can start investing in real estate without any money.
The answer is simple:
Let others purchase your real estate investments.
This concept has been in the business industry for years. Fortune 500 companies start investing through either fund-raising, borrowing money or selling company shares.
An unsecured loan is not the best option. You’ll have to pay back every penny. I don’t want you to get into the debt, just in the very beginning. At later stages, you cannot avoid using private money lending. This happens when you have scored customer trust and enough experience to predict the outcome of 90% RE deals.
You don’t have a huge company so it will be hard to sell shares. The fund-raising concept is reserved for non-profit organizations. These options are not working for RE investors, but one thing is clear.
Successful companies don’t use their own money. They rather find a way to fund their business ventures.
How to Buy Real Estate With No Money?
#1: Private Money Lending/Hard Money Lending
Private money lending is not raised by banks or mortgage lenders. It comes directly from individuals willing to invest in real estate. Private money pays a better return than most saving accounts and stock exchange markets.
Most investors offer the lender anywhere from 8%-18% interest rate. These are short-term loans and carry high-interest rates. Private/hard money loans are best suited for fix/flip cases.
Example: You find a deal worth $110,000 at $60,000.
Be conservative in your estimates and start finding your investment partner. Because it’s such a great deal, you don’t have to pay anything from your pocket. You can finance the entire deal through the investment money. Flip the property. Most investors will also pay the rehabbing costs. The loan is given by securing the lien on the property.
Sell the property. Earn your profit as a working partner and manager. Some investors like to invest 5%-10% on their properties. It does two things.
- Lenders feel secure.
- A great deal usually brings great ROI and you’ll earn profits on your invested money.
#2: Borrow Your Home Equity
Do you own a home? If so, you can take an equity line of credit to finance your new properties. Many investors have used their current properties to finance great deals. Done rightly, this provides great returns.
#3: Wholesaling
Before starting investing, newbies should first work in the real estate business. Wholesaling is a great way to get started. It’s simple. Find a great deal. Find an investor. Present your idea. You can charge a fee between $1,000-$3,000 if your investor secures the deal.
A wholesaler acts as a middle-man. You’ll sign a legal contract with the seller and then you actively seek the ideal buyer. The profits vary from deal to deal.
#4: Seller Financing
Seller financing works like traditional systems. It just happens without a bank.
The investor directly signs the deal with the seller. The contract outlines the repayment schedule, interest rates, and conditions when the lender can default the loan. The seller lends the property value. It’s like taking a mortgage loan without any down payment or bank approval system.
These 4 steps showed how to buy real estate with no money. You can use a combination of these strategies to form your business deals.
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