How to Buy Investment Property with No Money Down

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How to Buy Investment Property with No Money Down
Many people with an interest in purchasing
investment property may find themselves daunted
at the thought of coming up with the initial
down payment. A lack of cash flow can seem like a
big hindrance to a potential investor, but it
doesnt have to. There are many creative ways to
purchase an investment property with little to
no money down. Borrow the Money One simple way
to come up with the down payment for your
investment property is to borrow it. If you
dont have family members or friends who are
willing to front the money, look for a lender who
will allow you to finance it with a low interest
rate. Utilize Your Personal Property If you are
a homeowner, this could give you some serious
leverage to help you break into the world of
real estate investment. Consider taking out a
HELOC (home equity line of credit) or a second
mortgage against your own personal property to
come up with the down payment. Pay it back in
affordable monthly instalments. Assume the
Existing Mortgage Oftentimes, the current owner
of the potential investment property may be
willing to transfer their current mortgage to
the buyer. This is particularly helpful if the
seller needs to unload the property quickly or
if it has entered foreclosure. Figure Out a
Trade Another creative way to come up with a down
payment for your investment property is to find
out what you have that the seller needs and use
it as leverage to help you secure a deal.
Anything with cash value can be potentially used
as an enticing down payment. This may mean cars,
boats, jewelry, motorhomes, collectible items,
or even land that you own free and clear. If
youre not sure what you might have to offer,
ask the seller. Lease to Buy Option When
searching for the right investment property, look
for sellers who are willing to negotiate a deal
where you can rent with the option to buy.
Typically, the terms of this sort of deal will
allow the buyer and seller to negotiate a
monthly rent amount in exchange for the use of
the property. A portion (or sometimes all) of
this monthly amount will be applied towards a
predetermined selling price agreed upon by both
the buyer and seller. This may even afford the
buyer time to build equity within the property
so that they may secure their own loan later down
the line.
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Roll Down Payment into Purchase Price
This may be a little trickier, particularly if
your credit is less than sufficient, but it is a
viable way to secure your investment property.
While your interest rate will likely be
considerably higher, if you have the credit to
make this type of negotiation, it could be the
answer you are looking for. Use Your Skill
Set Much like your personal property can be used
when negotiating a deal for investment property
you can also put your skills to work for you. If
you have a tradeable skill of any value, consider
using it to your advantage. Examples of a
lucrative tradeable skill set may be something
like accounting, carpentry, legal services, et
cetera. Get a Partner If financing an investment
property is creating more of a headache than it
needs to, consider reaching out to others with
the same interests. Pooling your funds with other
investors is an easy way to take out some of the
stress, as well as share the responsibilities
that come with property ownership. Obviously
this can also come with its own set of problems,
being that more investors means more ideas,
opinions, and personalities. Offer to Take on
Sellers Debt If the current owner is selling
their property to help pay off their own debt
offer to roll their debt into the purchase price
in lieu of a down payment. Negotiate the
Terms When it comes to any type of investment
property, negotiation is imperative. If the down
payment is too high, you may consider asking for
an adjustment. You may also offer a sale price
that is higher than asking in return for the
removal or negotiation of the down
payment. Looking for Investment Property in the
Baton Rouge Area? Dont let a lack of cash flow
stop you from finding the perfect commercial
property investment. Use the tips and tricks
above to get creative with your financing and
then, call us! At SVN Graham, Langlois, and
Legendre, LLC, our team of dedicated Advisors has
a proven track record of giving our clients a
high quality experience from start to finish.
Take a look at our broad selection of properties
today and call us to get started! Source
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