There are two kinds of unsuccessful people. On one hand, some do not know how to be successful. People in this category will maintain their unfavorable status quo so long they do not gather the required knowledge for success.
On the other hand, some know how to be successful. However, they do not have the means for success. For example, this can be start-up capital for real estate investment success.
But how true is this? Better yet, is very little or even no money real estate investing a possibility? Fortunately, this article presents expert answers to these important questions. So, keep reading to stay informed.
Are There Methods to Get into Real Estate Investing with No Money Down?
Getting into real estate with no money down is a possibility. It usually means that more work would have to be done. However, it remains a possibility for those seeking a pathway into this financially rewarding industry. Some options for investing with no money down include:
Partnership
Some people have the means to invest in the industry. However, they do not have the time and/or the knowledge required.
You can leverage this challenge of theirs by offering your time, as well as your skills. However, this calls for having in-depth knowledge of the workings of the industry, especially in the local context. Speaking of partnership, you should iron out terms before you get into such a partnership.
Loans
You can decide to take out a loan. This is after you have identified an asset worth investment because of its financial prospects.
These loans, which should be strictly used for worthy real estate asset purchases can be secured from a traditional mortgage lender. However, the processes involved and the pace at which funds will be disbursed can be quite frustrating if granted in the first place.
To this end, you can opt for a real estate asset purchase with a hard money loan, which is a loan secured for real estate investment purposes. However, be mindful of the higher interest rates and shorter repayment terms usually associated with such loans.
You could even end up traditionally refinancing the loan. This is in the spirit of getting the highest possible returns from property sales or rentals. The point is that you would be initially investing without your funds.
Sweat Equity
This suggests offering valuable industry skills for a piece of the pie. For example, a carpenter can choose to offer his time and skill for free or at a significantly reduced cost. However, this decision would be because the carpenter in question would be getting a stake in the real estate asset in question.
By the way, several valuable skills can afford you sweat equity opportunities in the real estate industry. Some of the skills in question include:
- Construction & Renovation Skills – Such as carpentry, electrical work, masonry, plumbing, and painting & decorating
- Property Management Skills – Such as maintenance & repair inspection and tenant relations
- Marketing & Sales Skills – Such as Photography & videography and digital marketing
- Administrative & Organizational Skills – Such as legal expertise, bookkeeping & accounting, and project management
- Technology Skills – Such as proficiency in using pertinent software tools
Frankly, this is one of the least utilized pathways to real estate investment. So, it can be considered by those who have pertinent skills, have the time, and are willing to do this.
Are There Methods to Get into Real Estate Investing with Little Money?
Getting into real estate with little money is a possibility. By the way, the term “little money” is significantly relative. Having said this, some options for investing in the industry with little money include:
REITs (Real Estate Investment Trusts)
This is no different from buying stocks. However, you are buying stocks of a Real Estate Investment Trust and it offers the possibility of investing a small amount, depending on the minimum amount that can be invested.
Lease/Rent-to-Own
It involves leasing/renting a property with the intent and agreement to buy it later. Usually, the lease/rent amount would count as a down payment for the property purchase.
However, you should know that the lease/rent amount in such cases is usually higher. This is because of the existing agreement. Furthermore, there is the possibility of losing the lease/rent amount if certain terms are not met.
House Hacking
Some people might question how this qualifies as a little money real estate investment pathway. For starters, this concern is understandable, especially considering that you are purchasing a property.
Furthermore, this would be a property that has more than you need for space. However, you should know that there is the possibility of qualifying for low down-payment credit lines for such purchases. This is especially true for people who are making such a purchase for the first time.
Additionally, the extra space is to be rented out and the proceeds go into increasing and attaining complete equity. You can watch this video for more on the concept of house hacking.
Wrap Up
Real estate investment is one of the most capital-intensive investments. However, this is not to say that people with little or no money are shut out. Some of the ways these people can still invest despite their financial state have been discussed here.
So, such people should give serious thought to these investment options. This is so as not to miss out on the numerous benefits of real estate investing.
