How to Get Started in Real Estate Investing with No Money?

• Why invest in real estate?
• 8 ways to invest in real estate with no money
• Conclusion
• House hacking
• Owning shares in Real Estate Investment Trust
• Seller financing
• Lease option
• Co-invest in a down payment
• Home equity loan
• Micro-loans
• Hard money lending

You may have heard that investing means putting your money to work and building it into potential wealth.

Investing in lucrative businesses has always been considered a no-brainer as reaping dividends in the long term is more or less guaranteed. 

But what if you wanted to jump onto the investment bandwagon but have no money to invest? 

Worry not! Contrary to popular belief, you can still make an investment without any initial capital money.

Read on to learn about investing in real estate with no money. 

Why invest in real estate? 

Real estate has long been known as an avenue for safe investments as land values continue to rise propelled by the increasing demand. 

Real estate investment generates profits either through rental income or due to the appreciation of market value. 

The steady stream of monthly income as rent checks, tax breaks, equity, and passive income makes real estate investment a lucrative investment. 

According to the United States Census Bureau, individual real estate investors own more than 74% of all rental properties. Real estate has been proven as the ​​best way to invest money. Do you want to know 7 simple ways to close 5+ deals each month? Download this free ebook and build your profits.

8 ways to invest in real estate with no money

When you are financially strapped, investing options with no money in hand seem to lack credibility. But successful investors have paved the way for utilizing other people’s income as capital for your investment.

Still hard to believe? Check out the strategies listed below to find out how other real estate investors conjure money almost from the air to power their financial investments. 

House hacking

House hacking is a popular concept where you invest in a prime property and live in a portion of it while renting out the other usable units. 

When you have availed of a loan to buy the property, the rental income can be used to pay the equated monthly installments (EMIs). House hacking also allows you to live in a prime area at a reduced cost. 

Owning shares in Real Estate Investment Trust

Usually, when you own a property, you are at the beck and call of renters. Also, your money is tied to the property until a sale is made. 

Real Estate Investment Trusts(REITs) are a reliable and fast-moving liquidity avenue that allows you to hold shares of a property. These shares can easily be sold similar to selling stocks and the asset can be liquified easily. 

REITs also allow you to diversify your portfolio, thus giving you the opportunity to move properties quickly without the need to micro-manage them.  

Seller financing

Conventionally, buyers purchase a property from a seller by paying in cash or check. But seller financing is a radical method of purchase-money mortgage where a mortgage is issued to the buyer during the purchase of the home by the seller. 

This mortgage is used to replace a part or whole of the amount the buyer is liable to pay to gain ownership of the property. 

The mortgage is issued according to the terms and conditions laid out before the purchase and the buyers will have to repay the seller in accordance with the agreed terms. 

This is a proven method of financing a real estate purchase without possessing the whole amount. 

Lease option

You can rent a place with an option to buy in later. This essentially means that you can lease the property at a monthly/yearly rate higher than the usual rental fee. 

These high premiums can be counted towards the purchasing price of the property. 

Co-invest in a down payment

When you are short on cash, partnering with a friend, family, or another person helps pool the money needed for the investment. 

A written contract is recommended for adjudicating responsibilities and splitting profits. 

You can also co-invest with a building contractor who can essentially provide the skills and manpower needed to upsell a property, especially if you are vying for house flipping.  

Home equity loan 

If you have a high credit score, you can approach a formal lending institution such as a bank to take a loan for your down payment. This could even be taking a second mortgage on your home. 

Remember to take into account the interest rate and calculate the profit that can be garnered from the property purchase to check if an equity loan is financially viable.  

Micro-loans

Micro-loans are short-term small-amount loans which are relatively new financing avenues that can help support new and upcoming businesses with initial capital. 

Though these loans are generally lesser than those that can be typically availed at a financial institution, the borrower requirements are less stringent. This makes them a great option to secure some money for flipping houses, down payment, or to buy rental property. 

Hard money lending

Borrowing money is a viable option that can be used to secure the capital for your real estate investment. Hard money lending is money borrowed from groups of people or private individuals. 

These types of loans are quick and non-cumbersome compared to borrowing from lending institutions as they have little to no paperwork. 

The interest rates on these loans may be a bit higher than other lending instruments since the lenders are willing to support even risky projects.  

Another thing to remember is that hard money lending requires you to cover additional costs such as application fees, closing costs, broker fees, etc. 

Conclusion

Real estate investment is a lucrative instrument for building wealth, but for beginners, it can be intimidating and confounding. You can approach the best real estate mentor who can guide you through your investment process. 

Here, at lauraalamary.com, we have 30+ years of experience teaching real estate investing for beginners and helping them realize their individual business potential. Our testimonials are a testament to how our services are valuable, trustworthy, and transparent and how we helped them achieve financial independence.