Real estate investing is tough, and many think it is impossible to succeed with little or no money. But it is possible!
You heard, right. Real estate investing with no money IS possible. You don’t need considerable finances to acquire a deal. What you need are the right tactics to make the most beneficial deal. Here are some ways to get into real estate with no money.
Invest in publicly-traded REITs
A real estate investment trust or REIT is entirely made up of real estate investments – you either directly own a property or mortgage. The good thing about REITs is that the minimum cost is $5.
The plus side is that with such little money, you can have a decent return on investment from 5% to 20%. However, it would help if you also kept in mind that publicly-traded REITs have several limitations. Anything traded on the public market will have a limited average return because the stock price will be volatile to the changes in the dividend payout.
Home Equity Loans
Apart from looking at a cheap investment property, another option for real estate investing with no money is by home equity loans. Before applying for credit, investors look into terms and conditions of the loans that banks and other financial institutions offer. Many investors prefer to capitalize on the equity of primary homes and use it to finance the new property. Home equity loans are proven effective tactics when you think of investing in real estate with no money.
Buy a duplex live in one unit and rent the other
Did you know that you can finance a duplex with a Federal Housing Administration (FHA) loan? The down payment requirement with such loans is as low as 3.5%, and when you rent the other unit, the payback of your investment will be much faster.
You can search through private real estate investment companies such as Urban Revolt to find a perfect apartment. The good thing is that in addition to a low down payment, the rent you will receive from the other unit of the duplex will pay a good portion of your mortgage.
Microloans
As opposed to traditional housing loans or mortgages, microloans are usually issued by individuals. Microloans may be issued by a single lender or aggregated across several investors. In the second case, each of the investors will contribute a portion of the total amount to payout.
Government Loans
Government loans are one of the most acceptable ways of financing among both new and expert investors. Some of the government loans include USDA or VA loans, which may be useful if you have intentions to purchase your rentals as a primary residence.
Credit score and initial down payment requirements are more flexible in case of the primary residence. So, you may consider living in a property for a while, after which you offer it for rent.
Wrapping up
Whether you are new to real estate investing or have already closed many deals, real estate investing with no money is undoubtedly an option for a successful transaction. A well planned real estate investment can generate a stable passive income for its investors.
Whichever method from the above you choose, always remember that investing in real estate with little money is possible and is a great way to accumulate wealth. Before making your investment, always do proper research on whether or not it’s an optimal decision. Good luck with your real estate investment!
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