There’s money to be made in real estate, no; there’s LOTS of money to be made in real estate. The real estate market in the US is worth a staggering $156.2 billion, with an upward projection. This means there’s plenty of cash to go around for real estate investors countrywide.
If you’re itching for a piece of the billion-dollar pie, the best time to get into real estate was yesterday. The ill-conceived notion that you need lots of capital to invest in real estate is far from the truth. There’s plenty of ways you can invest in real estate with no money or experience.
That’s right; you can be a real estate investor with no money and zero experience in real estate. Don’t believe us? Well, keep reading, and we’ll show you how to do just that.
Give House Hacking a Whirl
House hacking is an excellent way to venture into real estate with no money. Despite the eccentric name, you have nothing to worry about; house hacking is perfectly legal. Before we get ahead of ourselves, let’s first look at what house hacking is.
House hacking is buying real estate property with multiple units, living in one of them, and renting out the rest. House hacking gets its name because you basically hack the housing system. All you have to do is charge enough rent to pay off the mortgage and make you a considerable profit.
The problem is what if you can’t borrow a mortgage loan, maybe because of bad credit history. Well, there’s a way around it. You can take out an FHA loan and buy a house with a low down payment. FHA loans have very lenient requirements meaning you can borrow even with poor credit scores.
Form a Real Estate Partnership
Another great strategy to venture into real estate with no money is entering into a real estate partnership. Partnerships are a superb way to get your foot in the door without much experience. This makes it an ideal option for beginners in real estate.
As the name suggests, partnerships involve partnering with other investors in a real estate venture. Partnering can help lessen the financial burden and responsibility of the investment. All that seems fine, but what if you have absolutely nothing to bring to the table.
If you can’t hold your own in terms of capital and experience, you’ll have to compensate for your “inadequacy” in other ways. You’ll likely be the person who handles most of the work regarding buying and managing the property.
It’s a fair tradeoff, considering you’ll probably make a huge killing from the venture. Just ensure you partner with the right people for the best results. Also, make sure your partnership terms are crystal clear to avoid any internal struggles in the future.
Hard Money or Private Lenders
If you’re having tough luck with financial institutions, you can always get some money from private lenders for real estate. Try securing a short-term loan from hard money lenders to finance your real estate venture. Private lenders will happily finance your venture, but you have to put up the property as collateral.
Although private lenders are not as stringent as conventional institutions, they have their downsides. The first disadvantage is that most hard money lenders only offer short-term loans. This means you have to pay off the loan in a year or two.
To most real estate investors, one or two years isn’t enough to recoup what they’ve invested. The second downside is some private lenders have astronomical interest rates that may dent your bank account. If you opt for private lenders, look for a real estate investment with low capital requirements and high returns.
However, some private lenders may have incredible deals that can knock your socks off. Do some serious digging, and you may find yourself a few promising lenders for real estate to help you with your venture.
Always be on the lookout for predatory lenders with extremely high-interest rates and unfair terms. Such lenders don’t always disclose these terms or may phrase them unclearly to dupe unsuspecting clients. Be extra vigilant when dealing with private lenders.
Real Estate Wholesaling
If hard money lenders aren’t your cup of tea, you can try your hand at real estate wholesaling. Real estate wholesaling is one way of investing in real estate without owning actual property. So how does real estate wholesaling work?
You first have to look for a worthy real estate investment with high-return potential with real estate wholesaling. After locking down the property, you put it under a contract and find someone who’ll buy the property. Remember, you’re selling the property at a higher price to make a profit.
The only money you need to use in real estate wholesaling is money for marketing the property. This strategy is a great way to give you a taste of real estate before going all in. Because you don’t own any property, you don’t use that much money to invest in real estate.
Another excellent way to invest in real estate with no money or experience is house flipping. House flipping involves looking for cheap, run-down property and buying it at an off-market price. After acquiring the property, you have to fix it up and sell it at a much higher price.
The problem is how to finance the fixes and renovations. Your best bets for funding the renovations are hard money and private lenders. It’s not a good idea to skimp on the renovation because you need the right remodels to increase the property’s value.
Investing in Real Estate With No Money Made Easy
The above information is all you need to know on how to start investing in real estate with no money. If you play your cards right, you can make a killing in real estate with an empty bank account. Real estate investing with no money is a piece of cake.
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