Want to invest in real estate, but you're short on the cash necessary to make a down payment on a property? You're not alone. Many people who want to make the smart move to invest in real estate properties aren't sure how to get started. Here, Nick Debeyiotis shares how to start investing in real estate when you don't have money to put down.
Use A Duplex As Your Primary
Residence
When you cut out paying rent and live in a duplex, you
can rent out the other half of your home and use the rent to pay your mortgage,
according to Nick Debeyiotis. You
can use an FHA loan to make a down payment of just 3.5%.
Buy a Primary Residence, Turn
It Into a Rental Home
Using a VA or USDA loan, you can buy a property for zero
money down. After a year, you're permitted to move out of the home and make it
into a rental. This means that you can collect rent on the home and use it to
pay the mortgage while you make a new home your primary residence. Over time,
this can lead to valuable passive income, according to Nick Debeyiotis.
Consider an Equity
Partnership
You may not want to go it alone when you're investing in
real estate, especially if you've got the drive to transform a property but
lack the capital to purchase the building. Equity partnerships allow one party
to find a fixer-upper in need of repair at a low price, while another party can
use their capital to finance the purchase. If you have friends who are in the
real estate business, it may be smart to ask around about investors looking to
work with someone who wants to take on property renovation projects.
Use Home Equity
If you already own a home, you may want to consider using
home equity to get some money to invest. You can either keep your current
mortgage and add a home equity line of credit or you can rewrite your original
mortgage and refinance, giving you the cash you need to get started with
investing. If you're considering this option, talk with a financial advisor,
your mortgage lender, or an accountant about which option is the best fit for
your financial needs, recommend Nick Debeyiotis.
Rent to Buy
According to Nick Debeyiotis, rent to buy options can be a smart move for people who don't
currently have the money to own a property, but want to invest in real estate.
This allows you to act as a tenant, renting a property from a homeowner on a
long-term basis. While you're renting out the property, you be able to make
changes and renovations, depending on your agreement with the homeowner. After
a predetermined time, you'll have the option to purchase the property for a
previously discussed amount.
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