How to Invest In Real Estate With No Money
When you invest in residential real estate, you are getting more than a home or a piece of land upon which to build a home. Real estate investment has become a popular way for people to make money, and it is not uncommon to buy a house or land without any intention of living there. Some people simply buy and hold property, waiting for it to appreciate in value before re-selling it. Having cash for a down payment is the quick and easy way to enter the real estate market, but it's not your only option. Many people have found ways to start investing in real estate with little or no money of their own. Options include borrowing money as well as a number of more unusual and creative paths to ownership.
1
Look into seller financing. If the seller is motivated enough, he/she may be willing to make it easy for you to purchase by giving you a loan. You could offer to make higher monthly payments instead of a down payment.[1]
- You could also negotiate a deal where the seller pays your down payment to a traditional lender in order to sell the property faster. The seller might expect you to pay him/her back or he/she may throw the down payment in for free, essentially lowering the selling price.
- For each of these scenarios, make sure you have a real estate attorney write up the agreement so that both parties are protected.
2
Lease the property with the option to buy. You can invest in real estate slowly by making payments on a lease agreement until you have the money to buy. Your payments would (at least in part) be credited toward the purchase price.[2]
- Ensure the agreement specifically states a final price for the property. Define the exact portion of the rental payments that will be put toward the final purchase price.
3
Work out a trade. You can pay for real estate by bartering another piece of property or a specialized skill you have. For example, a contractor could offer a real estate developer labor in exchange for a down payment.[3]
- Other possessions you could offer to swap include motor homes, campers, boats, cars, large appliances, valuable artwork and furniture.[4]
- For any bartering deal, draw up a legal agreement with an attorney specifically stating the value of each item in the trade. An outside appraisal may be needed.
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