How to Buy Real Estate with No Money (or Experience!)
The US real estate market is still big business, with 5.5 million sales of residential units alone in 2016.
A home is often the most expensive purchase in a person’s life. It’s also one of the main reasons a person will take out a loan. For those with poor credit or little savings, buying real estate often sounds like a pipe dream.
They might occasionally wonder how to buy real estate with no money or if it’s possible.
It can be done!
Keep reading to see how to buy real estate with no money or experience.
How To Buy Real Estate With No Money
Seller Financing
Those without ready cash can’t use standard real estate services, such as globalcitizenshq. They need to use creative alternatives like seller financing. In seller financing, the property owner makes a deal directly with a buyer. They agree on the size and number of monthly payments, interest rates, and what happens if the buyer fails to make payments.
In seller financing, the property owner makes a deal directly with a buyer. They agree on the size and number of monthly payments, interest rates, and what happens if the buyer fails to make payments.
They sign an agreement or contract that lays out the details. No money changes hands until the first payment is due. The buyer becomes the legal property owner.
Rent-to-Own
Rent to own probably sounds a lot like buyer financing, but it’s very different. In a rent to own agreement, the renter can buy some time in the future. Until then, the property stays in the landlord’s name.
A typical arrangement is that someone leases for a period of time. If or when the renter buys, a portion of the rent payment gets deducted from the selling price. Some rent-to-own agreements include an up front fee, but other use higher rent instead.
Rent-to-own lets someone start the buying process without needing more money than the monthly rent payment. It also gives that person time to arrange financing.
Assuming the renter meets all of the lease obligations, the landlord is usually obligated to sell if the renter wants to buy. The renter isn’t obligated to buy unless it’s included in the lease.
Partnership
If someone can bring a valuable skill to the table, they can often find someone willing to supply money for a real estate purchase.
For example, someone with renovation experience might partner with a friend or relative to buy a fixer-upper. The friend or relative fronts the money and the person with renovation experience takes on the manual labor.
A successful partnership depends on reaching an agreement everyone thinks is fair. There should be a contract that sets out the details very clearly. It must specify who gets what when the property sells.
Parting Thoughts
There are answers to the question of how to buy real estate with no money. A few of those answers are seller financing, rent-to-own, and partnerships. Each of these options lets someone get into the real estate game without needing a big chunk of their own cash.
What Your Boss Thinks strives to offer independent reviews and advice for buying decisions. Contact us today to share any thoughts or questions about this post.
