Discover how to invest in real estate with no money, using the simplest, fastest, and most recession-proof asset in real estate
There is a common belief that you need to have a huge capital reserve to get started as a real estate investor. This might be true for a lot of real estate assets. However, you can, in fact, invest in real estate with no money if you know what real estate assets to target and the best methods to use to turn a profit with no money in the deal.
In this article, we’ll walk you through exactly what to do and where to start.
What are the best ways to invest in real estate with no money?
As a real estate investor, your ability to grow your portfolio highly depends on how you raise funds to purchase properties. However, if you have little or no money to start with, you can still build and grow a successful real estate investing business. One of the best ways to get started or grow your business is to use other people’s money to fund your deals.
The following article lists the most common methods real estate investors use to do deals with no money down while still making impressive profits.
Hard or Private Money Lenders
If you have identified an excellent opportunity in real estate but don’t have the liquidity to do the deal yourself, you still have options. One of the most common ways to do real estate deals with no money down is by getting a hard or private loan from a money lender.
If you can’t get a loan from a traditional bank, a hard loan or private money lender will award you a loan that will enable you to close the deal. However, hard and private loans are subject to strict terms and conditions that are likely to favor the lender. You can also expect higher interest rates than you would receive from a commercial or private bank.
When you do real estate wholesaling deals, you don’t have to buy a property to flip it.
The first step to a wholesale deal is to find a property owner interested in selling their property for below market value. You would then get the property under contract, allowing you to market the property to prospective buyers for a fixed term.
You will need to find a buyer prepared to pay substantially more than the seller asks for the property. The difference between the seller’s asking price and the amount a buyer is willing to pay is retained as profit by the wholesaler.
When wholesaling, you will need to find properties selling for much lower than the market value to make a reasonable profit. Most wholesalers target distressed properties to achieve the margins necessary to make this method profitable.
When wholesaling land, it is a lot easier to find properties on the market for cents on the dollar and flip them to the right buyer at a significantly higher margin.
One of the most attractive ways to invest in real estate with no money is to use seller financing. When buyers are unable to secure a loan from financial institutions, they may opt to enter into a seller financing deal from the seller.
In this model, you would find a property and cover the upfront costs of the transaction using the buyer’s down payment. You will then contract with the buyer to settle the difference over a fixed term.
Seller financing is one of the best ways to get started in real estate investing using raw land. Financial institutions do not offer loans for the purchase of undeveloped land. As a result, seller financing is very common and very effective in land deals.
The Double Close
The double close method is another highly effective way to invest in real estate with no money in the deal. The secret to double closing on a property is to contract with a seller and a buyer simultaneously but separately. For example, you would find a property for sale below market value and place it under contract with the seller. At the same time, you will seek a buyer willing to pay closer to market value for the property.
You would then close the deal with the buyer, use their money to pay your seller, and keep the difference as profit. A double closing is a very effective way to build your real estate profits without affecting your cash flow.
Why is it easier to invest in real estate with no money using raw land?
If you have little or no capital available to start doing real estate deals, raw land is the best asset to get you started.
Land lots are generally more affordable than houses, multi-family units, or commercial properties. When you are flipping raw land, there are no costs associated with repairs or alterations. With the proper knowledge and skills, you can get started in real estate without ever needing to spend a dollar on a property.
You must keep in mind that you will need to invest in the proper real estate education to reduce your risks and fast-track your progress. You will also need to cover a few business costs, such as marketing and administrative fees. However, real estate investing is the most reliable way to build financial freedom, so a small investment in a qualified coach has the potential to get you on the road to creating the life that you want to live.
For more tips and valuable information on land investing, follow Land Profit Generator on our social media channels.