You may have heard about the lure of investing in real estate. It’s a relatively safe investment because real estate continues to appreciate in value. However, it can be difficult to get started if you don’t have enough money on hand to invest. There are ways to get into real estate by using someone else’s money.
The more common term for this process is rent-to-own. If you don’t have enough cash on hand to purchase a property, you can try to find an owner who will let you lease it with the option to purchase. The key is to find a buyer who will buy the property from you during the time you are leasing.
Take on an Existing Mortgage
You can take over a current mortgage and make the payments even if you don’t have credit to get a loan on your own or cash for a down payment on a new mortgage. Some states have restrictions on this method so contact a knowledgeable attorney in your area first.
Motivated sellers who need to sell quickly because of an impending foreclosure or other changes in their circumstances may be interested in this process. You don’t need to get a loan of your own, which allows you to sell the property faster for a return on your investment.
When you wholesale a property, you get a property under contract to purchase it without financing in place or cash on hand. After you have the contract, you find a buyer for the house and generally assign the contract to your buyer for a fee. Your job will be to find an interested buyer who is willing to take on the deal before closing. They will need cash or financing, but your obligation is finished once they agree to the purchase. You make a profit by increasing the price a few thousand dollars.
Find a Private Lender
Look for a lender who has the cash or credit you can use to buy your first property. Offer them a percentage of the profit in return for the use of their money or credit to get a loan.
Your lender doesn’t have to know anything about real estate, but you may need to explain why they should invest with you. It’s a good idea to create a proposal or presentation which proves your expertise or plan for financing.
Get started in real estate investing even if you have little to no cash available. Our Foreclosure Mastery courses go really in-depth on these strategies as well as other effective approaches that can be used in any real estate trend, to help you choose the right method for each situation.