Real property investment can be quite lucrative. The major drawback, however, to investing in real estate is the financing aspect.

“How do I finance this?” This is the usual question. People would oftentimes wonder who they could purchase a property if they don’t have the money to put down. This is an honest concern because, oftentimes, it would require a large amount of money to purchase a real property. However, if you would like to know the main objective in real property investing, it is to give the least amount of money when buying a property. The ultimate goal is no money down real estate investing. Is it for real?

No Money Down Investing Methods

There are different ways of no money down investing in real estate. There are people who have established a profitable and successful property flipping business and have also established a relationship with lenders who give them pre-approval. This makes it easier for them to enter into no money down transactions.

Another way of avoiding giving down payment is to assume the existing mortgage. The buyer or investor will not be required to give any down payment. However, in order to do this, the investor must secure the mortgage loan company’s approval.

The investor could also try another method of avoiding giving down payment. This is when the seller, himself, offers financing. In this case, the buyer has two options. He would either agree to pay a higher interest rate or the seller himself would lend the money but at a higher interest rate.

Another way to avoid giving down payments is by flipping properties. Investors have various options to choose from. He could get the money from a hard money lender, get a credit line, secure a home equity loan, secure a loan with a mortgage or get a partner who would supply the money.

photo credit: NathanF

The investor could also use lease options in order to avoid paying for down payment. The investor or lessee would agree to buy the property at a future time for a fixed rate. They would also usually agree that a portion of the lease will be credited to the purchase price.

There are investors who would use notes for no money real estate investing. The note is actually use as a collateral. The investor could also purchase the tax certificates for the tax lien or deeds over the property. If the property owner fails to purchase the tax certificates, the investor would then foreclose on the property.

Is no money down real estate investing for real? If you could find an effective method that works for you, you could take advantage of no down money real estate investing. There are methods that would work for you but there are those that would fail you miserably. You should be very careful though with no money down. Oftentimes, people would find themselves paying more than they should or owning a property that they cannot sell. The ultimate risk to no money down is that you could lose your control over your investment. If you could make this work though, you’d certainly benefit from it.