You want to get involved in real estate investing, but you don’t have the cash to put up your first property. Not having the money you need to get started can present a problem. There are good news. You don’t need to have money up front for a real estate investment deal.
Ask any successful real estate investor how much money they need to put down for a deal and they’ll tell you, “None.” He will surprise you the first time you hear him. You’ll even be surprised once you complete your first real estate investment deal with no money down. But after you get a few of these offers under your belt, you’ll become more credible.
No Down Payment Investing in real estate sounds like you’re getting something for nothing. And if there’s one thing we’ve been drilled into over and over again, it’s that you can’t get something for nothing. Forget what you’ve heard before. In real estate investing, practically anything is possible, including investing with no cash to put down.
So how exactly do you get started in real estate investing without having money to put down? Well, there are several different ways. The key is to be creative in your strategy and always think of ways to use other people’s money to fund your trades.
If you’ve ever bought a home before, you’ve probably heard of security deposits. Have you heard of double trust? Probably not. With double escrow, you buy a property and sell it at about the same time. Then use the money from the sale to finance the purchase of the property. Of course, your selling price should be a little more than the purchase price, that way after exchanging the money, you will have made a profit.
Using existing seller financing is another way to complete a real estate investment transaction with no money down. The property owner should already have some form of financing. You can make a deal with him or her to take over the mortgage for a period of time until the house is sold. After that point, use the money from the home sale to pay off the mortgage and keep the proceeds.
As you arrange no down payment real estate investment deals, consider which parties to the transaction already have cash. Then negotiate to use your cash instead of yours. You can always borrow the down payment or bring in other partners to invest without putting up any money.