A lot of people wish they could just start investing in real estate. However, what keeps most of them from getting started is having no money to begin with. So the question is: Is it possible to start investing in real estate with no money?
Well, this must be one of the most asked questions in the world of real estate investing. Sure enough, the answer is: Yes, you can!
But what do we really mean when we say investing in real estate with no money? Can you really invest with $0 balance on hand? If that is the case, then how can you buy an investment property to start with? What are some real estate investment strategies that do not require any capital on hand?
Related: Is It OK to be in Debt While Investing in Real Estate?
These are the questions that we are going to answer in this blog. So keep reading to learn about investing in real estate with no money!
First: What do we mean by investing in real estate with no money?
Well, when we say that you can start investing in real estate with no money, we do not mean it literally. What we mean by this is that you can start investing with very little money in order to make a lot money. And by very little money, we mean as little as a few hundred dollars. These few hundred dollars if invested well will turn into a few thousand in return. This is the very reason why we refer to it as investing in real estate with no money.
Though it is not an easy process, your goal is to transform your financial situation. So, you have to be ready to put some effort into this. You are going to start first with finding the right real estate investment strategy that complements your goals and visions. Then you are going to take the steps necessary to make it happen without much financial effort.
Second: What are some sources to finance your investment property if you are investing in real estate with no money?
As we said before, it is possible to start investing in real estate with no money. There are a few ways you can finance your first investment property that we are going to present as follows:
Borrowing money:
Yes, we mean this in the most traditional way. You most certainly have a family member or a friend from whom you can borrow the money you need to start investing in real estate. All you have to do is document it with a payment agreement and provide some guarantees. Just make sure this will not harm your personal relationship with your lender in the future since money is a very sensitive matter, especially amongst family and friends.
Getting a loan:
There are plenty of loans that you can benefit from as a real estate investor. All you have got to do is look for the best options that serve your investment goals. You should also take into consideration the monthly payments. Make sure you are capable of paying them. There are a few sources from which you can get a loan. It could be a bank or even a private money lender. After you have taken the loan, you buy your investment property and let it take care of the payments.
Related: Is Mortgage the Best Way to Finance Rental Property?
Saving money:
This is another traditional way of financing your real estate investing business if you do not have the money at the moment. This method is always available at any time and for everybody. You can save some money for a couple of years until you have what you need to buy an investment property. It does take time, but you will not need to borrow the money.
Co-investing:
Co-investing or a real estate partnership is another form of financing your investment property when you have little or no money. You do not have to have the money, but you certainly must have the skills and experience in real estate investing. Find someone who is willing to provide you with the money credit to start your business. In return, you will provide him/her with the knowledge, experience, and most importantly the deals. Otherwise, no one will risk investing money in a real estate business partnership with you.
Third: What are some investment strategies that you can go with when investing in real estate with no money?
The real estate investing business is so diverse. Therefore, it has a wide variety of investment strategies that require little money or even no money at all. Here we are going to talk about two of the most popular investment strategies, especially, for beginner real estate investors:
Wholesaling real estate:
House wholesaling is one of the best investment strategies to get started in the real estate business. Basically, what you have to do is find a property that is selling for less than it is actually worth, assign it to a contract, and then find a buyer who is interested in purchasing it. Keep in mind, the contract has a time limit during which you should close the deal. Of course, you get paid to do so, and you will not have to use your own money in it.
However, when we say that you won’t have to use your own money, we mean that you won’t use it on your deals. But, you will need some money for marketing yourself to others as a wholesaler. Still, it is easier to borrow a few hundred dollars for marketing than borrowing the money you would need to buy a whole investment property.
House hacking:
House hacking is a form of creative real estate investing. In fact, it is very creative, especially if you are new to the real estate investing business and have no money at all. This could actually be the best strategy for investing in real estate with no money. All you have to do is get a loan and buy an investment property in which you are going to live while making money out of it. It might sound a bit unrealistic, but it is possible. You buy the property and live in it while renting it out to tenants. Whatever rent you charge for it is going towards paying off your loan.
For example, you buy a multi-family house, live in one unit and rent out the rest. The rent you collect every month is going to take care of the loan monthly payments. In this way you won’t have to use your own money to invest in real estate.
Related: Creative Real Estate Investing: Is It Really a Thing in the Real Estate Business?
Bottom line
Investing in real estate with no money is actually possible even if you are just starting in the business. We have presented you with real estate investment methods and strategies that you should consider, and all you have to do now is proceed with setting an action plan. Put all that you have learned about investing in real estate with no money together, and go ahead and explore the lucrative real estate investing business.
For more advice and tips on real estate investing, keep reading our blogs on Mashvisor.