Real estate investing catches the attention of many due to the attractive incentives that they are likely to hear about in relation to successful investments, such as unique tax advantages, hedges against inflation, stable income returns, and more.
You might find yourself considering getting in on the real estate investment market, but what if you lack the proper funds to get started? Can you invest in real estate with little or no money?
The short answer is yes, you can do something about it, even if you don’t have all of the money that you need. However, there is more that will need to be done on your part in terms of work and thinking outside of the box if you want to do so.
With this in mind, we are going to be taking a look at five ways that you can begin investing in real estate even if you have little to no money. Let’s get started.
- 1. Find Yourself An Equity Partner
- 2. Grants And Loans From The Government
- 3. Crowdfunding
- 4. Hard Money Lenders
- 5. Renting Out Your Home
- How To Invest In Real Estate With No Money – Frequently Asked Questions
- Final Thoughts
1. Find Yourself An Equity Partner
There are many barriers that you will come across when it comes to investing in real estate, but if you find that money is the only one- or the main one- that you need to get over, then finding the right equity partner to bring on board with you can be incredibly mutually beneficial as well as a way to get over that financial hurdle.
An equity partner can deal with the financial barriers that you may not be able to. In return for this, they will request a percentage when it comes to the ownership of your particular property.
This partnership will allow your equity partner to have involvement in several aspects of the property, such as purchasing, as well as renting and managing it in general.
Your chosen equity partner will also be entitled to a portion of the profits generated by the property.
The great thing about equity partnerships is that they don’t have to be limited to only two people. Investors can bring in several partners if necessary, all of whom will pool their resources and funds together in order to secure a particular property investment.
If you are struggling to find the right equity partner, consider attending some real estate meetups or getting thoroughly involved in the investor community, as this is a great way to integrate yourself amongst a vast variety of potential investors.
2. Grants And Loans From The Government
If you’re new to the real estate investing game, it might surprise you to know that there are quite a few loans and grants available from the government that you can use to help you on your journey.
This is because real estate investors play an integral role when it comes to aiding the government in meeting housing needs and demands in the United States.
These grants are designed to offset some of the financial burdens that many real estate investors have to deal with.
The funds you can receive from these grants come from local governments as well as the federal government and the state, but you don’t have to pay them back as they are grants (which is another positive point!).
The grants can be specific and are usually targeted, with one example being a grant that requires the investor to renovate the property accordingly so that it is inline with certain green standards.
Let’s take a look at some of the grants that are available to help you out with your real estate investment.
- Assisted Housing Stability and Energy and Green Retrofit Investments Program
- Economic Development Grant Program
- Emergency Capital Repair Grant
- HOME Investment Partnerships Program
- US Department of Housing and Urban Development Grant
Some of these grants will need a Grant Proposal to be submitted in order to apply, so make sure that you read all of the specific requirements so that you get the best possible chance to secure the financial grant.
To find out more about each of these grants, be sure to visit Grants.gov.
You would be forgiven if the first thing that comes to mind when you think of crowdfunding is small startup companies, but in our modern day and age, crowdfunding goes far beyond small businesses.
It is definitely possible to build your real estate investments via real estate crowdfunding.
There is no doubt that investing in real estate has always had a high barrier when it comes to entering the field, due to the need for finances as well as connections. Sometimes, it just isn’t a feasible option for everyday investors.
However, crowdfunding is helping to break down those barriers and give the average investor a chance.
There are all sorts of benefits to utilizing real estate crowdfunding, such as growing and attracting a larger network of investors, and providing experience that will build your credibility and reputation.
4. Hard Money Lenders
This financing option allows either private individuals or groups to finance you and your real estate investment.
Hard loans can be an attractive option as they bypass the stricter vetting processes that banks abide by, allowing for investors who may have less experience and capital to secure finances faster.
However, it is important to remember that since hard loans are private, there are risks that you need to be aware of. This can include possible higher interest rates, which can be detrimental in the long run.
To make sure that you know exactly what you are getting when it comes to a hard loan, do your research and always remember to read the fine print thoroughly! Be willing to negotiate better interest rates if you find that they are on the higher end of the scale.
5. Renting Out Your Home
Current homeowners might not even be aware that they are sitting on a money making opportunity, but this is certainly the case for potential investors who own their own homes.
If it is a possibility for you, you can always consider turning it into a rental property to start building your finances to get into real estate investing.
Multiple bedrooms can also be a benefit, as it can mean that you can allow multiple tenants to rent it out.
You can then charge them rent that totals more than your mortgage payments, so that you can effectively still pay out your mortgage and make additional income to put aside for investing.
How To Invest In Real Estate With No Money – Frequently Asked Questions
How Can I Find Leads To Get An Initial Deal?
Modern society has led to a huge increase in the effectiveness of creating connections via social media, and the same can be said for new investors looking to find their initial leads.
Not only is social media cheap and effective, but you can also use it as an advertising platform to attract possible investors.
How Do I Choose The Right Name For My Real Estate Business?
Beginner investors need to establish their brand and the name of your business is the first step to doing so.
Do your research beforehand to see what kind of names the competition is using, why they have chosen them, and how they came to that name. This should help you draw some inspiration, but try not to overcomplicate things.
Remember, you want people to remember your business name though, so consider something short, sweet and snappy that can easily stick in the minds of consumers.
What Kind Of Marketing Strategies Work Best For New Investors?
There are so many marking campaigns for new investors to try their hand at, from direct mailing campaigns to social media strategies. Do your research to find the campaign that you feel suits your new business the best.
These are just a few ways that you can go about trying to break into the real estate investment industry, even if you don’t have much money to do so.
There are plenty of other avenues that you can take advantage of too if you are struggling with the financial side of real estate investment, so make sure to do your research thoroughly to find out which method works best for you before you begin making commitments!
Paul Martinez is the founder of BendingDestiny.com. He is an expert in the areas of finance, real estate, and eCommerce.
Join him on BendingDestiny.com to learn how to improve your financial life and excel in these areas. Before starting this blog, Paul built from scratch and managed two multi-million dollar companies. One in the real estate sector and one in the eCommerce sector.