Real estate usually requires money — to buy investment property, you must put down significant amount of money.
You can put down 20% on the purchase of investment property but you will have to wait until you have more money to invest in the next opportunity. It is a conservative way of investing.
There is a another way. Please note “Low or No Money Down” is strictly referring to your own cash.
Most successful real estate investors get creative on structuring their deals including the financing.
5 Ways to Buy an Investment Property
- Seller-financing is a popular type of 100% financing
- You can uniquely structure the loan terms
- Gives you time to renovate the property
- Wholesale for Short Term Income
- Wholesaling is another popular “no-money down” method.
- Similar to flipping, wholesaling is a fast real estate investment strategy, but the wholesaler makes no repairs.
- The wholesaler contracts with a seller and then advertises the home to potential buyers.
- When the wholesaler assigns the contract to the buyer, the wholesaler makes a profit between the contract set up with the seller and the amount the buyer pays.
- The wholesaler must find a buyer before the contract with the seller ends.
- Joint-Venture (Equity)
- This venture is with two parties contributing cash for the down payment and getting a bank loan for the remainder
- You can contribute time instead of money to the joint venture
- Private Loan
- Private loans are loans between a private lender and you.
- You can negotiate the terms to fit your deal
- You can negotiate no payments for a short-term private money loan for one year.
- Secured Line of Credit
- Use the equity in your current primary residence
- You could get a home equity line of credit (HELOC)
- These loans have low-interest rates
- The payments are interest-only payments.
- Use a strategy called Velocity Banking to reduce your Interest costs.
You can buy property with very little or no down payment if you look hard enough. To grow a real estate business, you need multiple sources of funding.
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