Demystifying Real Estate Investing Part One 9 ways to Buy with Zero money down
Sounds too good to be true right? Not if you’re like me and are of the mind to work smarter and not harder!Let me be clear when I say “no money down”, what I really mean is none of “your money” down. Not that there is no money being spent. If you are just beginning your adventure into Real Estate Investing this 4 part series is being written with you in mind. Real Estate Investing doesn’t have to be a scary, stressful or complicated event once you know what you’re doing.I have spent almost all of my working life focused on taking the fear and stress out of owning Real Estate Investment property for our Home Owners. Now I want to take a step back and focus my efforts on helping take the fear and stress out of the purchase of Investment Property.The next 4 months Newsletter will be focusing on Demystifying Real Estate Investing.
Starting with the most popular question. How do I buy with no money down?
It is possible to purchase an investment with no money down. Here are some of the most commonly used options:
- Negotiate a separate installment plan
- Trade or exchange
- Have the seller transfer the mortgage to you with an option to finance the down payment directly.
- Apply for a loan assistance program.
- Roll the down payment into the purchase price.
- Wholesaling
- Using partners
- Equity lines of credit
- Private or hard money lenders
Retirement accounts can be used to purchase real estate such as a self-directed IRA
Traditional Financing
The way most people buy property is by getting a mortgage. When selecting a mortgage you should shop around. Lender fees can be very different and negotiable.
It is important to get pre-approved for a loan before you ever start shopping. This way you will know how much of a home you should be shopping for and get an idea of how much your closing costs will be. The interest rate your will get will depend heavily on your credit.
Types of Loans to consider
- 15 or 30 year
- Conventional
- FHA
- VA
How Much of a Deposit is Required?
Down payment specifications can vary depending upon the loan you choose, contract terms, and if you are buying from a new home builder. The standard requirement is usually 20%. However, if you are purchasing new construction, some builders only require 5% down and may even offer in house financing. Make sure you disclose how you are purchasing the property as there may be specific terms that prevent you from using your investment how you intended.
Stay tuned for next month when we will discuss how to select an Investment property
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