Financing TipsHow can you be buying rental property with no money down? by Ranah Asad October 9, 2017February 5, 2019 by Ranah Asad October 9, 2017February 5, 2019How can you be buying rental property with no money down? Is it even possible? Buying rental property with no money down IS possible, though it’s by no means common. Nor is it easy. You see, we all face that same problem: “How can I get money if I don’t have any?” You need money to make money! And trust me, nothing in life comes for free or without a price. You will have to be able to put money down if you want to purchase anything from anyone, i.e., you have to exchange something for something else. If someone is going to give it to you for nothing, then trust me, you don’t want it. So, the question becomes: “How is it possible to be buying rental property with no money down?” Let me tell you how!Related: How to Buy a House With No Money Down as a Real Estate Investor?Who says that money buys courage? No one of course! What you need to keep in mind before making any decision in real estate investing is that how good the DEAL is what matters, not how much money you have. It doesn’t take money to make money, it takes guts and courage. The thing you should be going after in real estate investments is the deal, not your budget or how much money is in your pocket. Most people make decisions on how much money they need based on their job and on how much money they spend, but this is backward. You should make the decision on how much money you want, regardless of how much money you spend or have. This is why some people never get ahead. So, before making any assumptions or excuses about buying rental property with no money down, grow the courage to go out there and explore your options.Related: Want to know how to buy rental property with no money down?Different ways to buy rental property with NO money down:Purchase money mortgageThere is something called a purchase money mortgage, where the seller lends you money. In this case, the bank might lend you 80% and the seller 20%. Aside from the closing costs, that would make it a no money down deal. However, most traditional banks won’t permit you to use borrowed money for the down payment. Those that do will insist that their loan be the superior lien. And many of the sellers who offer this kind of deal charge more for the property than they would if they didn’t do a purchase money mortgage.Hard and private money lendersThe most popular course of action when buying rental property with no money down is through the use of hard or private money lenders. These loans are not given by banks, but rather by individuals and businesses aimed at financing investments for a return. In addition, these loans are generally comprised of their own set of criteria, which also include more fees and higher interest rates to deal with. Let’s take a look at each one.Hard money lenders: Unlike private money, hard money lenders set forth fees in the form of points. Ranging from three to five, these points represent an added, upfront percentage fee based on the borrowed amount; this is on top of the interest rates that hard money lenders charge, which range between 10% and 18%. Fees and interest rates are not universal with hard and private money lenders, so real estate investors need to do their due diligence.Private money lenders: These loans, which bring speed and efficiency to every real estate transaction, will typically costs investors somewhere in the neighborhood of 6% to 12% interest on the money borrowed.Related: Real Estate: How to Invest with Little MoneyPartner up!A very common path in real estate investment is to go for real estate investment partnerships. What one investor lacks, the other can make up for. Many real estate investment partnerships will entail one partner finding a distressed property at a discounted price, while the other one uses his/her credit score and working capital to finance it; just make sure everyone is bringing something to the table. You see, buying rental property with no money down doesn’t have to be so difficult. You know what they say: Two hands are always better than one!Trade away!Buying rental property with no money down doesn’t always have to require “money” in its literal meaning. Many professional real estate investors trade one rental property for another one. You can trade a big investment property for more than one smaller rental property. Find a property seller who is willing to trade, and go for it. The advantage of property trading is that real estate investors can avoid the capital gains associated with selling a property legally.Credit linesProbably the most common type of “no money down” purchase is when investors use credit lines to cover the entire purchase price of an investment property. This is what buyers at foreclosure auctions often do. They use the credit lines to come up with the cash to buy the property. Then, once they own it, they refinance or try to fix-and-flip it for a quick profit.Related: Buying Investment Properties With No MoneyThe bottom line:The ability to understand, recognize, and take advantage of nothing-out-of-pocket strategies are the hallmarks of successful real estate investors. Why? Because they’ve mastered the art of buying rental property with no money down and investing in real estate with no initial capital. For newer and financially strapped investors, this is an attractive way to get their foot in the real estate investment door without having the financial resources and credit to do so. The answer to “How can you be buying rental property with no money down?” is easier than one might suspect. The trick is to know the options available to you and how to use them. In the end, it’s all about having the courage to go out there and explore your options and open doors to new opportunities. It’s never too late or impossible to invest in real estate, even if you start with NOTHING! Be sure to check out Mashvisor for all the hottest tips and strategies on investing in real estate and further advice on buying rental property with no money down. Start Your Investment Property Search! START FREE TRIAL Fix and FlipHard Money LendersMortgageNo Money DownPartnershipsPrivate Money Lenders 0FacebookTwitterGoogle +PinterestLinkedin Ranah AsadRanah is a long-term content writer at Mashvisor with a degree in strategic studies who enjoys writing about all aspects of the real estate investment business. Previous Post How Do You Find the Best Rental Investment Property Analytics? Next Post Buying and Owning an Investment Property Is the Best Real Estate Investment. 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