It takes money to make money. You will often hear this adage when you want to branch out on your own into the world of real estate investment. Most people want to invest in real estate, but never really do it because they don’t have the money. But did you know that you can invest in the real estate market with no money? It is not necessary to have you own money to invest in real estate. As long as you can get access to finances and you know the rules, it will pay off for you.
Hard Work is the Key
Investing in real estate with no money is not everyone’s cup of tea. It is tough and requires hard work. You will have to make lifestyle changes and be willing to step out of your comfort zone, something most people do not like.
If you are not afraid to get your hands dirty, you will succeed in this field. Remember, it requires patience and proper strategy to make it work for you, especially if you are going in without money.
Here are the rules you need to follow to invest in Real Estate with no money:
Rule 1: Speak to a Lender
Before you decide that you have no money and hence, cannot approach a lender, think again. In fact, your best bet to invest in real estate with no money is a reputable and reliable lender. It is possible to purchase a home if you intend being the owner occupant. Make sure you live in the house for about two years and then you can re-sell it, laughing your way to the bank.
Check with the lender the loans you can qualify for. Be sure to delve into FHA loans that allow you to purchase a home through down payment help programs.
When you go to a lender, the picture becomes clear – whether you will quality or not. If not, the lender will tell you what you need to do to qualify and the steps you should take to hasten the process. You will even get an idea how much loan you will qualify for if you follow the lender’s advice. This will help you plan ahead and come up with a strategy that fits into your future loan amount.
Rule 2: Use Other People’s Money
Look around you – you will see friends and family investing in the stock market or pension funds. They do this without knowing the person or professional who will invest on their behalf. So, why can’t you approach these people? Make sure you have a complete plan in place to answer their queries and lay their doubt to rest.
If you offer them a great deal and ask for large sums of money and not paltry amounts. Of course, the people you approach should have that kind of funds. So, do your due diligence before you start asking for money. Touch base with family and friends. If you like, you can even get in touch with private lenders for money. However, make sure you go for a big deal so that you can purchase several units simultaneously and hire a property manager to look after them for you. This is the way it will pay off and make you and others money.
Rule 3: Get a Co-Signor
When a lender tells you that you cannot qualify for a loan, don’t get upset. Find a co-signor, who can co-sign the loan with you. Remember, the co-signor will be responsible for the loan so make sure you tell the person upfront about it. They should understand what they are getting into and this will make your life and theirs easier.
Here, it becomes important to show the co-signor that you have a great deal. If necessary, agree to share some percentage of the profits with them. This should win them over and they will be ready to enjoy a share of the pie.
Rule 4: Opt for Wholesaling
This is one of the best ways to invest in real estate with no money. You will need a little bit of money to pay for driving around and using your mobile. But, you can do this will a few hundred dollars in your pocket.
Wholesaling in real estate is quite akin to flipping. However, you do not do any repairs or fix niggles. It requires you to get in touch with someone who is selling their home, market the property to prospective buyers and then assign the contract to the property buyer. For doing this, you get paid a percentage. The entire process happens quickly. It is perfect for people, who have limited or no finances to get into the world of real estate investment.
Now you know the secret of investing in real estate with no money. It is not easy, but if you are willing to work hard and make sacrifices in life, you can succeed.