Many people would love to get an investment property, but they either do not have enough money to make a down payment or are not so eager to lock their cash down in a property purchase right away. However, what if you see an underpriced investment property that you just can’t take your eyes off, a must-have. Now you’d need some creativity because, in truth, you can still pull it off- get an investment property with no money down. Check these ideas out.
• TRADE SOMETHING THAT ISN’T CASH
You can get a piece of real estate with something other than money, like a car, a boat, or valuable collectibles. Find out what the realtor can collect in place of cash, and you just may be in luck to have what they need. You could also trade services such as auto mechanics, carpentry, painting, dental work or other services which you can offer the seller over time as payment for the piece of real estate.
• APPLY FOR A LOAN ASSISTANCE PROGRAM
Several lending institutions offer programs which give buyers the opportunity to make real estate purchases with little or no money. You can never know where your luck may lie, the key to getting your dream property may be just a couple of blocks away.
• ROLL THE DOWN PAYMENT INTO THE PURCHASE PRICE
Depending in your credit score and lending history, some lenders may allow you to finance 100% of the acquisition price for the piece of real estate you have in mind. This will raise your interest rates and your payments significantly than if you had made a cash deposit. However, if you intend to sell the property quickly, it shouldn’t have any significant effect on your profit margin.
• TRADE HOUSES WITH THE SELLER
Good old barter system right here, many professional investors purchase homes with no money down by swapping one piece of property for another. In some cases, one large piece of property may be traded for several smaller rentals. Trading properties is also a legal way to avoid capital gains associated with selling a property.
• GET OWNER FINANCING OR A LAND CONTRACT
Another great option is to have the seller act as the bank. This way, you make your payments, including interest directly to the seller and after like 3-5 years, you make a substantial payment to the seller. During this period, you should have sufficient equity to qualify for a standard bank loan.
• NEGOTIATE A SEPARATE INSTALMENT PLAN FOR THE DOWN PAYMENT
You can negotiate a different instalment plan for the down payment. Sometimes the seller allows you to pay the down payment on a monthly basis.
• GET THE SELLER TO TRANSFER THEIR MORTGAGE TO YOU.
This is a regular occurrence in foreclosures where the homeowner is in a hurry to sell and is ready to work with the buyer. You can do the deal as a transfer of contract and efficiently close the sale.