It’s no secret that real estate is a big business. Fortunes are made in real estate everyday. It’s an industry that moves fast, and if you don’t make quick decisions and act when opportunities presents themselves, you will probably end up missing out.
And yet, sometimes the funds needed to invest simply aren’t available. The good news is that anyone can learn how to invest in real estate with no money. Don’t believe it? Well, it’s true.
Let’s take a look at some ways that you can still get in on great real estate investment opportunities even when you are short on cash.
Start from the Bottom: How to Invest in Real Estate with No Money
Real estate investing typically requires starting capital, but we think unconventionally. Learn how to invest in real estate with no money here.
Home Equity Loans
A home equity loan allows you to take advantage of the equity of your primary home in order to finance the purchase of a new property. Banks and other types of financial institutions offer a variety of different home equity products that enable buyers to capitalize on the equity they have already built up.
Some of these products include Home Equity Installment Loans or a Home Equity Line-of-Credit. These can be ideal for someone just getting started in real estate investing.
The best way to get the ball rolling is to visit your bank and talk to them about available options and discuss which products they have that would best serve your needs.
The name says it all. A microloan is a small loan that is typically geared toward a new business. This type of loan is much smaller than a traditional business loan that financial institutions offer.
Because the loan balances are generally so small, the qualification requirements tend to be much less strict. Thus certain variables such as your credit score will not carry so much weight in the approval process.
A microloan would definitely be a good funding alternative when wanting to invest in real estate with no money.
Lease to Own
Leasing a property to own is an option for individuals wanting to invest in real estate when you have no cash available and a poor credit score.
Under the lease option, the buyer pays the property owner a monthly or yearly premium. These payments are higher than rental payments, and the excess fee is applied to the purchase price.
This way the buyer is able to invest in the property without having to buy it outright and without needing a loan, a down payment, or significant outlay of cash.
This is just one of many ways that make it possible to sell your home in no time.
Hard Money Lenders
Going to a hard money lender as a source of funding is typically something you’d only want to consider as a last resort. There are certainly advantages and disadvantages to pursuing this type of funding.
These loans come from groups or private individuals, therefore they typically don’t have to go through traditional corporate procedures for approval. This also enables loan funding to be secured quickly.
These private funding sources tend to be more willing to back risky projects, and thus charge a significantly higher interest rate and fees. The terms of these loans normally require repayment in 12 months or less.
The advantage of getting a hard money loan is that approval for funding is easier, and that therefore provides the borrower with the funds needed for a real estate investment. The downside to this kind of loan is the high interest rate, the shorter repayment time-frame, and the costly fees the borrower must pay.
Special Government Loans
Believe it or not, there are certain situations where special loans are available from the U.S. Department of Agriculture’s Rural Development office. These USDA loans are only offered in towns with populations of 10,000 or less. This might seem like a very small town, but it’s really not.
These government loans are intended for those who qualify as having low or moderate income, and the mortgages are given with down payments as low as 0%.
This makes it possible even for those with little to no income to invest in real estate.
Trading houses is a fairly simple way to acquire a new property with no money required. There is not much to understand about the process. It’s a matter of one property owner trading houses with another property owner. This enables you to acquire a property you desire while avoiding the capital gains tax typically associated with selling a property.
The benefit here runs both ways, with each of the two parties getting what they want with no money changing hands.
This is a very popular way of investing in real estate with no money.
With a seller-financed purchase, it’s unnecessary for the buyer to secure a loan through a bank or other financial institution. In this situation, the seller extends finances to the buyer with specified terms that the buyer repays as if repaying a traditionally financed real estate loan.
This can be a good option for a buyer who has been unable to secure a loan elsewhere. It allows the buyer to purchase the desired property without money, and the seller is still able to profit from the sale of the property.
Becoming a Player in Real Estate
Learning how to invest in real estate with no money is not a new concept. After all, it has always been challenging for many people to come up with the funds needed for investing. Banks are often reluctant to lend, thus making it difficult to qualify for a traditional loan.
This has made it necessary for a great number of people to be creative in finding ways to invest in real estate with no money. And yet each and every day, thousands of people manage to find ways to get the funds they need to make their dreams a reality.
Click here to learn how the right mortgage can reduce your stress when buying a home.