Can You Spend No Money In Real Estate Investing?
Most people fear venturing into real estate investing thinking they need a lot of money to start. Others fear the "No money down" scams out there.
Can you really invest in real estate with little or no money? Let us explore this topic in this article. Most people fear venturing into real estate investing thinking they need a lot of money to start. Others fear the "No money down" scams out there. S
Can you spend little to no money investing in real estate? This article dissects this topic.
To buy real estate traditionally requires that you have cash, or get a loan, which also requires a lot of cash as down payment.
If you are a real estate investor looking to do many deals, this can become unsustainable.
Let us explore alternative methods of buying real estate with little to no money:
1) Wholesale real estate investing
Wholesale real estate involves locating a cheap property then putting it under contract. You then turn around and get a real estate investor to buy it at a wholesale price.
You can either assign the contract to the buyer, or you can do a simultaneous closing where you buy the property, then sell it on the same table.
If you do a contract assignment, then the only money you need is earnest money when you put the property under contract. This is usually $100-$500.
Your real estate investor buyer must produce earnest money, meaning you come out with no money of your own.
A few things can happen in a simultaneous closing. You might be able to use your buyer's cash to close the first transaction when you buy the property. The same cash is used to close the 2nd transaction. The difference between the two transactions is your profit.
In this transaction you spend no money.
In a double closing, you might need transactional cash to close the first transaction. You can get it from hard money lenders, usually spending no money of your own.
Again, no money of your own is spent.
2) Seller financing
Sometimes, you may negotiate with the owner so they accept monthly payments instead of all cash for the purchase.
You might have to produce some down payment to make this happen.
Then you get a buyer who makes monthly payments, usually higher than you make. Of course, they will have to produce more money down than you have paid, meaning you end up spending no money of your own.
Such deals are owner financing, lease options, rent to own, etc.
In this case you will need the down payment to make the deal happen.
3) Partnership
Your real estate investing transactions can be funded by a money partner. You spend no money of your own, but share profits.
4) Financing
You can finance your real estate transactions with an equity line of credit.
Even though you pay interest, you do not spend your own money.
No matter what type of real estate investing business model you do, it is important to close as many deals as you can spending as little money, time and effort as possible to be profitable. Learn how an automated real estate investor website can simplify your business putting more money in your pockets.
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