Successful real estate investors can make money in any economy, in any market, but today’s super-soft real estate market can make it even easier because of the abundance of motivated sellers out there.
Here are 5 real estate investment strategies you can implement right now without using any of your own money or credit.
1. Quick Flipping – Wholesaling
This is the classic buy low/sell low strategy and it’s the best way to make fast cash.
Basically, here’s how it works. You find a seller who is motivated, negotiate a low purchase price, and you both sign a purchase contract. Now you can “assign” your contract to another buyer.
For example, you contract to buy a house worth $140,000 for $100,000. You “assign” your contract to your new buyer for $15,000. You never actually “owned” the house, you never used your own money, and your credit was never an issue.
These How-To Articles explain quick flipping houses in much greater detail:
And if you’re still doubtful it can be done, here are a couple of real-life Success Stories from our visitors. If they can do it, you can too.
2. “Subject To” the Existing Mortgage
With this strategy, you use the seller’s existing financing, taking title “subject to the existing financing.” You agree to make the seller’s mortgage payments, and the seller gives you the deed.
Sounds crazy, doesn’t it? But it’s not. Motivated people who need to get rid of their house do it every day.
Charlie Frances has done well over a hundred “subject to” deals, and she explains it much better than I ever could here:
And Marko Rubel explains how to get sellers to pay you money to take their deed:
If you’re still doubtful it can be done, here are a couple of real-life Success Stories from our visitors. If they can do it, you can too.
3. Lease Options
A “lease option” couples a real estate “option” with a “lease” on the property.
A real estate “option” is the right to buy a property at a specific price within a specified period of time. But even though you have the right to buy, you do not have an obligation to buy the property if you chose not to exercise your option.
With a lease option, a tenant is placed in a position to ultimately own the property they are renting. The tenant makes a non-refundable deposit (called “option consideration”) for the right to ultimately buy the home. The lease option tenant also makes monthly rental payments and handles minor maintenance.
You can use this strategy to both “buy” real estate and to “sell” real estate. Here’s a lot more info:
And here’s a real-life visitor Success Story:
4. “Soft” Private Money
5. “Hard” Private Money
I’ll discuss these together because they are both “private” money sources that allow you to put together a real estate deal without using your own money. Here’s the difference.
Hard Money is usually much more expensive than other private money. The lender looks solely to the property for repayment, so your credit is not an issue.
The maximum loan amount is 65% of market value, the interest rate is very high (maybe the current rate plus another 8%), and you have to pay 5 to 10 “points” for the loan. Each “point” equals 1% of the loan amount.
Like I said, it’s expensive money. But it can really serve a purpose and has launched many successful real estate investing careers.
“Soft” Private Money is usually a lot less expensive than hard money, though it may be tougher to find. Do you know people (like my dear mother) who keep their savings in CDs getting less than 2% interest? Perfect for private money. At 6%, they’re tripling their yield.
My friend, Dave Lindahl, explains the difference here:
Here’s more excellent info:
And here are a couple of real-life Success Stories:
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I hope these “no money down” real estate investment strategies inspire you to get out there and do more deals! Let me know what you think in the comments box below…