The real estate sector is a thriving one. Many make investments; buying lands and building houses to be put up for lease. Of course, the best way to be a part of it is to have money for purchases. However, you can still buy properties without having cash. Although without money, something still needs to be offered. It could be your time, your expertise, or your skill set. Yes, there are deals that can be done without you having money. How? You ask.
Here are 6 ways you can get into the real estate business with little or no money at all
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If you have big ideas, strong business plan and a great track record, then you can get a partner who has what you don’t – money. The person can provide the funding while you stay on the managing aspect of the business. You should also discuss how profits will be shared. Make it a win-win for your partners and make it happen.
Another form of partnering is by investing with a building contractor. If you lack some skills such as carpentry and plumbing skills, to fix up and resell a property, you can partner with someone who has these skills and could help with the down payment. Once you make a profit on the sale, you will have the down payment for your next real estate investment.
Talk to people
There is no money needed to get a deal under contract or locating deals for investors. You can help people find deals, then you can have people who will be willing to fund your deal, or better still, you might have gradually made money to buy your own property.
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Borrow money from family or friends
If you have no money to start your real estate business, borrowing money from family and friends is another option that you can employ. This may be less formal, but be sure to give them an official promissory note with payment due dates, a specific interest rate, and what ownership, if any, the lender will have on the property. Keeping your word is very important for it may determine how they will receive you if you have a similar need in the future. If you pay back the loan on time and with interest, these lenders might be willing to lend to you again for future projects. This is a great option, but many relationships have been destroyed because they did not handle the processes involved properly.
Work out a trade
You can pay for real estate by providing the required/specialised skill you have. For example, a contractor could offer a real estate developer labour in exchange for a down payment.
Look for desperate sellers
These people are desperate to sell for reasons such as bankruptcy, divorce, the death of a relative, an out-of-town new job, poor condition of the property etc. They are usually more willing to provide funding to close the deal quickly.
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Look into seller financing
If the seller is motivated enough, they 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. You could also negotiate a deal where the seller pays your down payment to the buyer in order to sell the property faster. The seller might expect you to pay him/her back or s/he may throw the down payment in for free, essentially lowering the selling price.
Whatever you decide to do, make sure you get a real estate attorney to write up the agreement so that both parties are protected.