Real Estate Investing With No Money Down
Most real estate investors assume they need some money to get started, and this will hold them back. This assumption is wrong. There are lots of deals you can do spending little to no money of your own. In addition, most people are unable to invest in real estate because most lenders have tightened their lending procedures too much. Even if they qualify for a mortgage, they have to put down as much as 20% and can only buy a few investment properties.
Most prefer to invest safely with little to no risk, and should have been looking at wholesaling houses for years. Wholesaling houses involves locating and flipping cheap houses for a profit to other real estate investors. You can assign a contract to another real estate investor with cash. When you assign the contract, the deal is closed by your buyer using the terms of the contract. The assignment fee is what you walk home with at closing. You can also buy and sell the property on the same closing date with a simultaneous closing. This means you have a contract to buy the house and another contract where you are the seller. Of course, your selling price is higher than the buying price, and your profit is the difference, less fees and expenses.
A few years ago, most lenders did not care if you used their money to close the first transaction in a simultaneous closing. In recent years, most lenders now require that you have money to close the first transaction. But there is a way around this, and this is where something called transactional funding comes in. Transactional funding is available to real estate investors and allows you to cover up to 100% buying under-valued properties which you sell for a profit. By short term, both transactions can be close as close together as is practical. Transactional funding can be available within a short time, such as within a few days. It does not require that you to have good credit have money in the bank or a steady income. All they need to see is a qualified buyer lined up for the property. Qualified buyer means someone with verifiable cash such a real estate investor, or someone approved for a loan.
In the current market, there are a lot of distressed properties for sale and lots of foreclosed properties that real estate investors can buy and sell using this method. You end up investing with little to no risk – no tenants, repairs, etc. As long as you can find a steady supply of properties and line up buyers, you can plug into this business model.