Since real estate is one of the safest investments you can make, it’s important for anyone building wealth to seek out this route to reaching their financial goals. If you’re looking to invest in a property for more than just a roof over your head, finding the money for it is challenging when you’re cash strapped. Thankfully, there are ways to get your very own investment property with little to no money down.
Here are four ways you could be funding the next step in your financial future.
1. Find a Partner
In just about every successful company in the world, there’s an “ideas” figure and a financier. If you have a keen eye for what kinds of properties could make money, that doesn’t mean you’ve have the chance to invest in a property yet. If you know of a friend or colleague who is interested in an investment property and who has the cash to fund it, link up with them to get started.
Equity sharing allows you to put in only a portion or none of the initial cash to invest. They’ll put the whole property in their name and you’ll pay your half in monthly payments until you’re both equal partners.
Investing with a partner gives you the chance to access bigger and better properties without having to tap your own limited resources.
2. Get Loan Assistance
All across the country, loan assistance programs from banks of all sizes have helped investors reach their goals. If you’ve always been financially responsible, even with limited resources, you’ll have a strong credit rating. This bodes well in how soon lenders hope to get repaid.
When lenders have confidence in your ability to repay them for the money they loan you to invest, they’ll be more willing to give you a loan in the first place.
It’s challenging to get any kind of loan without putting any money down and it’s hard to get started in investing without having some kind of pre-existing investment. However, you can crack this catch-22 with the help of loan assistance programs that many financial institutions support.
3. Consider Rent-To-Own
One great way to get an investment property without having the cash to put down up front is to consider a “rent-to-own” agreement. If you’re investing in a commercial property with the intention of occupying one of the spaces, you could set up an agreement with the current owner.
Ask the owner to add a clause where you could get the option to buy. This kind of lease option gives you the chance to build some equity and then have your own investment property in five years or less.
During this period, work on your credit and save up for a down-payment for your next property, unless a portion of your rent is going into the down payment. In a lot of cases, you’ll be able to start your investment by paying rent dutifully.
4. Get A Land Contract
If you don’t want to work with a bank or have damaged credit, it’s hard to find that first investment property to prove you’ve got what it takes to build wealth.
However, if you have a strong relationship with the current owner or seller of the property you’re looking at, you can allow them to act as your bank. Owner financing or land contracts are a powerful way for people who want to keep ownership in their communities to build local wealth.
From your position, all you have to do is to pay regular payments, including interest, to the seller of the property. In most agreements, you’ll save for a lump sum in 3-5 years, during which time you can repair and rent out the property. That lump sum will give you the kind of equity to then get a standard loan from a bank if you’re interested.
Finding Investment Property Is The Only Real Challenge
Given that there are so many ways to fund investment property without very much money down, all you have to do is to have an eye for what will make you money. One of the best ways to ensure that your investment property helps you to build wealth fast is to invest in property that you can turn around and rent. That rent can start paying off taxes, fees, and the money you owe the financier.
If you want some help finding the perfect property, contact Clever to get connected with one of our top-rated, local Partner Agents for guidance and support throughout the process — you may even qualify for a Home Buyer Rebate, which could put up $1,000 of the purchase price back in your pocket after closing.