Five Ways to Invest in Real Estate With No Money
Investing in property could affect your life for many years to come, both positively and negatively. However, with the higher stakes comes a potential return on investment that's much larger than stocks, bonds and bank interest. If you're eager to get into the real estate game but don't have liquid assets, there are still ways to get a foothold in the business that don't cost the earth.
Joint Venture Real Estate Deal
You might not have money on your side, but if you're willing to invest time, then that alone could be your avenue in. A joint venture deal will allow you to bring whatever asset or skill you have to the table in exchange for a share of the profits. For example, you could renovate the property and increase its value in exchange for a 20% share of the gross rental or sale profits.
There is no prerequisite for capital in the wholesaling game as you're not actually expected to purchase property – it's an investment in time and knowledge. Sellers expect you to seal the deal very quickly, and will offer a commission in return. Wholesaling real estate investors are essentially middle-men, acting as the mediator between buyers and sellers.
Seller Financing Loans
A seller financing loan differs to other loans as the sole intention from the beginning is to make money for the seller. This method allows the seller to get rid of the property and earn an income through interest payments, while the buyer gets to invest without any upfront costs. Fundamentally, instead of acquiring a loan from a bank, the buyer acquires a loan from the seller, who receives both mortgage payments and interest.
It's not always possible to get a bank loan. However, there could be private lenders who would be willing to take a chance. Taking this route can not only result in greater flexibility with regards to eligibility, but leaves everything open to negotiation as, unlike banks, private lenders will have their own in-house acceptance criteria.
If you're on a lower income bracket you may be eligible to buy a house through US Federal Housing mortgage insurance. Even if you're on a moderate income it's still worth applying and making your case. Each application is reviewed on a case-by-case basis, and while there are certain perimeters that must be followed, your own personal circumstances could tilt the scales in your favor.
Fundamentally, investing in real estate will always require some form of investment, be it money, expertise or time. However, by taking one of the avenues featured above, there's no reason why you can't get into the industry and work your way up. Eventually, with time and repetition, you'll build up contacts and relationships in the business, as well as liquid assets and cash, and this will make your journey easier if you start a new project.