3 ways to buy rental properties without putting up down payment
Most people who want to invest in real estate are often stuck by the down payment which they have to put up. Without the down payment, it would become immensely difficult for you to buy the property. The problem is that the down payment can be a huge amount. Therefore, at times it can become extremely difficult for you to actually put up the
You need to understand however that there are a few ways with the help of which you would not have to worry about the down payment and you can still buy the rental property and give it on rent. This would ensure that you are able to get the passive income quite quickly. We would today share with you 3 such strategies which you can use.
- Owner financing:
When the seller is highly motivated to sell, you can ask them for owner financing. Of course, it would be dependent on your offer as well as on your credit history. However, it is not unheard of that owner financing is provided to the prospective buyer as well. Once you are able to find such a property, all you need to do is to just look at the tenants to whom you are renting the property.
You need to understand that the risk is on the part of the seller as if they are not able to find your lender; the deal might get canceled as well. That is why you can always ask them whether they would be interested in owner financing or not.
- Bridge loans:
If the property requires a lot of repair work, you can opt for the bridge loans. You have to make it clear to the current owner that you would be able to get significant after repair value. You need to understand that these strategies are also used when the bank forecloses the property. Bridge loans would again be dependent on the work which is involved in the property.
However, many of the sellers also these days are opting for such strategies in order to sell the property quickly.
- Partner loans:
If you’re not able to get the loan by yourself, you can opt for a partner loans. Also, it is up to you to manage the property as well as sell the property at a later date. In this type of deal, your partner would be putting in the down payment as well as the debt. You have to only manage the property. Also, the maintenance would be on you and in
case, the property is vacant, the expenses would be on you. It is still better than not being able to buy the property.
Therefore, instead of being dejected that you would not be able to buy the property without proper down payment you have to look at these 3 options. Sure enough, these 3 options are not easy to achieve. Many times, sellers do not have the motivation which is required to offer owner financing. In such a case, you would not be able to get the property. However, if you are able to look closely enough, it would indeed become easier for you to gain such financing options as well.
You need to also understand that when you’re going for a partner loans, you have to look at the type of person with whom you are getting into a partnership. Once you are able to do that, it would become easier for you to decide whether you should go for partner loans or not.
Thus, you can surely get the property without down payment as well provided you use any of the 3 strategies which we have highlighted above.