Everybody knows how good is real estate as a business option. It is one of the highest-grossing businesses in the United States as well as all over the globe. It is that kind of business which can earn you a lot of money in no time, but of course, you have to be smart for that. The best thing about real estate business is, it has rarely faced bad times. Real estate business keeps on growing day by day, year by year, and it is considered as one of the safest investments all over the world. Even if an economic crisis hits a country, the real estate business is still regarded as a safe option because it rarely gets affected by such adversaries fortunebuilders.
Now, there is a general perception that real estate investing needs a significant amount of money to start. To some extent, it is true. But, if you are a smart thinker and you have got what it takes to be a successful real estate investor, then you can start with no or minor investment. Have you ever heard about Kent clothier or Graziosi? No? Kent Clothier started his real estate career with only $500 in escrow, and today, he is one of the most famous realtors with flipping more than 1000 properties and managing more than 5000 properties. Graziosi, on the other hand, spent his childhood in bathrooms and trailer parks, and now he owns more than 400 properties. It is hard to believe, but it is true. These two gentlemen started with zero or minor investment, and they have built empires now. Besides, there are a lot of examples similar to these.
If you have money to start with, that’s great. But, if you are short of funds and want to start investing in real estate, then it is still very much possible. You have to be smart and good enough to learn the market tactics. Apart from that, here are some options that might help you with this commonly asked question “how to invest in real estate with no money.”
- “Charity begins at home:”Now, if you are looking to start a career on real estate and you own a house or a property, then this is a “blessing” for you because you can actually start earning with no money at all. You can rent out a portion of your property and start earning regular rentals. Even if you own a small house and there is not much space. You can rent out a single room also, and people are doing this for a long time.
- Buying a home for your own residence: Another feasible and wonderful option is to buy a home with literally zero percent as a down payment with the help of USDA LOAN. Although you have to stay in that house for a minimum of one year and after that, you can move out and rent out that property and start earning rental income. This option has several advantages. 1st, you can start a transaction with zero percent down payment. 2nd, you can pay the principal amount with interest in regular installments, and that is pretty easy to manage. 3rd, once you can move out of that property, you can rent it out and use those rentals to pay your installments. 4th, once you become the owner of that property, you can use it in whatever way you want. You can keep earning rentals, or you can sell it with profit and restart the cycle.
- Purchase a duplex:if you don’t know about this option, well, here is the real treat for you. You can have the option to finance a duplex consists of two units, and you can do this with the help of an FHA loan. Do you think about the down payment? Well, the down payment is only 3.5 percent of the total contract. Now, what are the advantages attached to this option? 1st, two-unit duplex allows you to use one of the units for rental purposes. Just rent out one portion and start earning rental income and ease your mortgage burden. 2nd, once you have paid all installments, you are free to do whatever you want. You can sell it or rent out the other unit as well Wealth Fit .
- Look for a “hard money” lender:One feasible and commonly used option is looking for hard money lenders. Find these lenders is not a difficult thing at all, and “hard money” is actually not that hard to find. These money lenders work individually or in the form of groups and give you short-term loans. That seems easy? Right? But there is more to it. Although they have nothing to do with your credit score or your credit history, they are only concerned about the interest rate. Their interest rates are higher, usually ranging from 10 to 18 percent. They will own the concerned property until their loan is settled off. These kinds of options are useful when you are looking for short term transactions because the interest rates are way too high in these cases. So, if you think you can resell that property with and handsome profit, this might be the option for you.
- Borrow from a friend or family member etc.(Private money lending): Private money lenders may include your friends, neighbors, colleagues, or family members. If you can get an interest free loan, then you have hit the jackpot, but this doesn’t usually happen because even private money lenders may charge you 6 to 10 percent interest and may ask for some sort of security (maybe that related property). But, the good thing is, you do not have to go through the lengthy processes that are associated with banks or other financial institutions. Besides, there are no hard and fast rules in private money lending. It depends upon you and your lender.
- Start working as a real estate agent: Well, this is something that can really get you a lot of money if you have the required skill set. According to the stats, on average, a real estate agent in the United States is earning $45,990 annually, while some high profile realtors are earning more than $110,000 yearly. Being a real estate agent, you do not need any investment to get things going. But, it is to be mentioned again, you must have professional skills to be successful in this field. You need to find the right buyers, right sellers, and “profitable properties.”
- Working with a partner: If you don’t have enough or even no money to invest. But, you know how the market works, or you have some professional skills up your sleeves, then you can still make it work. How? All you have to do is find someone who is willing to invest but does not know how and where to invest. Of course, there will be a contractual agreement, and you may have to pledge something as security (not often). But, if you do not have the required investment, this can be a good option for you. You can work on a profit-sharing basis, and it is not a bad thing at all if you can earn money without investing anything at all. Is it?
- Flipping or wholesaling: Flipping a property means buying a property and selling it in no or very short time and earn the profit. But for that, you need to find a demotivated or stressed seller and a motivated buyer for this purpose. There are some “broken” or “damaged” houses, and their owners are willing to sell them way below market rate because either they don’t have enough funds to repair the damage or they want to move out. This is where you can get in. Find that seller and a motivated buyer. Once you have both the parties on board and the contract is signed, you can either use the buyer’s money to pay the seller, or you can get “hard money” and complete the first transaction (pay the seller). Then, sell that property to the buyer and repay that “hard money.” Similarly, wholesaling is also a very useful option for newbies because it does not require any investment or good credit score. You just have to find a seller, negotiate as much as you can, and make an agreement to buy the house. Then, find a buyer, who is willing to buy that particular property, get him on board, and pay the agreed amount to the seller through the buyer, keep your “share” or “fee” in your pocket. You may be surprised to hear that people are earning up to $20000 or even more with this method.
Not everyone has the luxury of having a lot of money for investment. But, this does not mean you cannot excel in this field or any field. Many millionaires or billionaires started from scratch, and they built empires. Bill gates started from a “house garage,” and everybody knows where he stands today. You just have to be determined and smart.