While it is advisable to have a decent sum of money in savings at all times, not everybody can afford that luxury given moderate incomes and a whole host of expenses. That is no reason to give up on your goal of buying investment property, though. Fortunately, it is entirely possible buy investment property with little to no money. Here is a look at some approaches to making this possible.
Equity partnership
If you happen to have limited funds or a poor credit score, an equity partnership might be the right approach to take. Whatever you may lack could be compensated for by the other partner, provided that you have something to offer as well. Typically, one of the equity partners finds a distressed property at a discounted rate and the other utilizes their credit score and part of the finances to expedite the purchase.
Transfer closing costs
There are times when sellers offer to take on closing costs to expedite a sale, saving buyers a significant lot of expenses. The catch is that buyers are expected to pay the full selling price or a significant proportion of it. So long as your rent is enough to cover the expenses and provides a decent amount of monthly cashflow, this is an option worth considering. On the flip side, be ready to walk away if the selling price equals or exceeds the rent you wish to charge.
Private money lenders
If you are looking to borrow money but are wary of turning to banks or credit unions, you could consider borrowing from private money lenders. These loans come from individuals and businesses with the goal to finance investments for a profit. It is worth noting that there may be relatively strict conditions attached to this financing option, including higher fees and interest rates. Make sure you weigh all your financing options before settling for one that suits you best.
Remember that you do not need vast cash reserves to buy investment property; knowledge about investing with the right people on your side can help you achieve this with little to no money.
You can get in touch with me for any assistance or advice about buying or selling a home in Greater Boston. Feel free to call me or send me an email or get in touch on Facebook.
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