One of the biggest things keeping people from investing in real estate is lack of financing, thinking that they’re limited to a particular financing venue. However, the reality is that there are creative no money down strategies for financing out there. To take advantage of them, all you have to do is learn about them and implement them.
Here are several no money down creative real estate investing strategies to consider:
Subject To Financing –
My Niche2Wealth strategy for building wealth involves purchasing homes ‘Subject To’ the existing loan. This is a highly effective investing strategy because the mortgage loan never even goes in your name. You don’t have to approach the banks or any other kind of lender, because the loan stays in the seller’s name. You simply negotiate a good deal with the seller, have them sign over the deed to you, and you turn around and provide a lease-to-purchase agreement with a new tenant, using their monthly rent to pay that original mortgage.
This strategy is one of the best no money down creative real estate investing strategies out there. I’ve used it time and time again, and my students have wonderful success using it as well. Of course, as with any investing strategy, there are tips and techniques that you can learn to make the process go smoothly, which is why I offer invaluable books and courses to assist my students every step of the way.
Private Lenders –
A private lender is an individual who happens to have large amounts of money and are willing to loan some of it out at an interest rate that suits them. Think about those that are left large inheritance checks, receive large settlements, sold their company, or just have mega bucks. You can go to someone and offer them a reasonable interest rate on their money in the hopes that your good track record will cause them to say “yes.”
Of course, getting a private lender can be more challenging, as most folks with large amounts of money just don’t love to lend their money out unless people have proven themselves quite well in regard to success. And, there’s always those who advise never to lend or borrow money from family, friends, or even acquaintances for fear of something going awry and the relationship suffering.
Seller Financing –
Rather than take out a mortgage, some people go to the seller and ask them for a loan to purchase the home. This is called “seller financing”. A seller or owner can finance a deal to you with an interest rate set by them, as well as a repayment schedule and any conditions. This is an option for those who the banks may not lend money to because of a low credit score, laps in employment history, or low salary.
However, there are some disadvantages. Sellers can set the interest rate really high or the buyer might default on payments and the seller is left in a pickle. Even worse is that due to the shorter nature of the loan duration, there could be a large balloon payment due at the end of the terms, which the buyer might not have.
Do what’s best for you
If you’re looking for no money down ways to invest in property, I firmly believe ‘Subject To’ is the best way to go. You don’t need a down payment, your credit isn’t a factor, and you can rinse and repeat the process time and time again because you’re not relying on the bank or seller for financing.