How to invest in real estate without money? 10 simple tips

Form alliances

If what you want is to enter the world of real estate investment, equity partners are one of your main options, since they allow you to invest with a minimum amount of money. An equity partner is a person who guarantees the financing of a property, especially when the real estate you want to buy is well outside your budget range.

Home Equity Loan

Not having capital is not an excuse not to invest. In fact, you can successfully do it through a home equity loan. This loan can be obtained through the bank, and it is a strategy to obtain the greatest benefit from the accumulated value of a property and, thus, finance the purchase of a new property.

Exchange one property with another

If you already have a property, but you do not have enough money to buy another one that will give you greater benefits, then you can resort to exchanging a new property for an older one. By doing this, you will not only get access to a higher value property, but you will also save a considerable amount of money on the payment of estate tax on the sale of real estate.

SBA loans

According to real estate experts, the United States Small Business Administration, or SBA, works with lenders to provide greater financial benefits for small businesses, especially when it comes to finding commercial space. In this area, the small business administration only requests the advance payment of 10%, while the loan can be used to build or make improvements to the property.

REITs

A REIT, or Real Estate Investment Trust, offers important advantages, the main one being liquidity. For example, if you own at least a percentage of a house or building, you can only make a profit at the time the sale is completed. The good news is that you can buy different REITs in companies that are dedicated to buying buildings such as hospitals and shopping centers, since this works as a kind of shares in the stock market.

HELOC

HELOC or Home Equity Line of Credit, will help you access a line of available cash worth 70% to 80% of home equity, with which you can get hundreds of thousands of dollars. But what is the HELOC for? Many people turn to him to make renovations to their homes, as well as to finance a new property that can be used for rent.

Invest in a property

According to real estate experts, buying a home through Veterans Affairs or USDA-issued loans is an excellent option for investing in real estate without starting cash. The key step, they say, is to stay in the property for at least a year (this helps reduce credit requirements) and then move elsewhere to offer the property for rent.

Wholesale

Wholesaling is understood as the process of finding a house at a discount, signing a contract with the seller to finalize the purchase and searching for a potential buyer to generate a profit. In these cases, you will be participating in the process of buying and selling a house, generating enough income to invest in a future property, without having to contribute investment capital.

Seller financing

Among the benefits of this type of transaction are: negotiable purchase terms, relatively more affordable closing costs and lower requirements to qualify for credit. This type of strategy is used mostly in properties that have already been 100% paid off. That is, the seller becomes a kind of financial institution to whom you will have to pay a mortgage.

Microloans for a property

If you want to start investing based on any of the above strategies, but you don’t have money, another option is to apply for a microloan, which avoids contact with banks and other financial institutions. These types of loans are granted by one or several entities, and allow access to amounts of money that can allow the purchase of a property either to sell or rent.

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