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The lack of finances is not an excuse for not investing in real estate

Many of us assume that investing in real estate is not possible without money. Though having cash in the form of down payment is a quick way to enter the market, it is not the only option. Some people have succeeded in investing in real estate without any personal funds. If you lack personal finances but are interested in real estate, you should look for options to achieve this. The following strategies can help.

Consider seller financing

A seller who is determined to let go of the property may let you acquire it without a down payment. Make an offer such as paying higher payments every month in place of the down payment. A motivated seller can even give you a loan so that they sell the property fast. For such a deal to work, ensure your real estate attorney prepares an agreement that protects the rights of each concerned parties.

Borrow the funds

You can also borrow money from different lenders. Get a lender that offer low-interest rates or seek assistance from a real estate broker. Alternatively, you can ask a family member or friend from some assistance. Sign an official promissory note with the due dates and interest rates indicated.

 A bank can also give you a home equity loan to use as down payment on top of the existing mortgage loan. In this case, you can use your home as collateral. Ensure you apply for a loan that you can afford to pay back on time to avoid losing your home.

Get a partner

Try to find another cash buyer and partner with them. Your partner can provide the necessary funding as you handle the management. For this to work, you need a contract that states the responsibilities of each party and how to divide the profits. If your partner offers financial support, you should oversee the day to day management of the investment.

Rent the real estate property with the option to purchase

You can also rent out the property from the seller with the option to purchase it. You can negotiate with the seller the amount you should pay at regular intervals during the duration of renting the property. Such an agreement allows you to buy the property at a certain price during the lease term. Most of the rental payments are credited towards the buying price.

Consider barter trade

It is possible to pay for a real estate investment by bartering a specialized skill you have or possessions. For instance, if you are a contractor looking to invest in real estate, you can offer free labour in exchange for the down payment.

If you don’t have specialized skills in the field but possess valuable items such as a boat, car or motor home, you can swap them for the down payment. An attorney should also be present during the deal to draw a legal agreement. The value of each item should be clearly stated. You may also need an outside appraisal to close the deal.

Reasons why every homeowner should become a DIY landlord

Due to the high cost of living, the rate of purchasing new homes has reduced. Statics reveal that only 60% of the population can afford to buy new real estate properties. Though the demand for such property is low, there seems not to be adequate houses to fulfil the needs of those who can afford to buy new homes.

This happens because the already existing homeowners choose to rent out their homes instead of selling them out. Landlords have realized that they can get instant cash flow from renting out their property. Becoming a DIY landlord is a smart move to supplement your income. DIY landlords now have an easy time due to the development of online rental platforms and technological tools.

This form of real estate investment can help you grow your wealth within a short period. It is a job that may come with challenges due to dealing with tenants and maintaining the property. The following suggestions can help you become a successful DIY landlord.

Avoid buying what you own

Purchasing a real estate property comes with so many costs such as inspection fees, closing costs, and agent fees which make it expensive. The process of closing the transaction is also tedious and time-consuming.

To avoid all this, consider renting out your current home before you start shopping around for another property to rent out. In this case, you can avoid the many finances that come with purchasing a new property such as commission fees and closing costs.

Apart from that, you already understand the condition of your home. You are conversant with the maintenance history of your home making it easy to manage it when you rent out. You can also budget easily for the areas that need maintenance better than a property manager running the new property.

The location of your home is crucial

Location is a critical aspect of real estate. As a landlord, one of your tasks is to try and attract tenants to your property. Renters get to choose property according to where it is located. By renting out your already existing home is a wise move since you already know everything about the area and neighbourhood. You also understand the market for the property well and can easily convince renters to settle in your property.

Your mortgage is more of an asset than a liability

Debt is only bad if it is not handled properly. In real estate, a mortgage is more of an asset than a liability. This is because, from the mortgage, you can create new income from the investment property by renting it out to some tenants. The rent you receive from them is extra income that you can use to pay off your mortgage.

DIY landlords have a lot of merits from renting out their already existing property. Every homeowner should take advantage of this opportunity to earn additional income from their property. You can treat your home as a small business and manage it yourself. If you know how to manage the property well, you can build a solid real estate portfolio.

Read this before investing in a distressed property

For you to invest in real estate, you must understand the different types of properties and how profitable they are. The poor condition of a distressed property means that it needs more money and work compared to a fixer-upper.

Most investors know that distressed properties can generate high profits. You must, however, weigh the merits against demerits to determine if it is the right type of property to invest it.

How can a distressed property benefit an investor?

A lot of investors consider purchasing distressed properties due to their low price. Banks and homeowners facing disclosure try to get rid of these real estate properties as fast as they can. Their rash to complete the sale makes them set the properties at a lower price compared to the market value.

When buying a distressed property, you get the upper hand during the negotiations. Due to the low price, you can purchase the distressed property easily, renovate it to raise the market value then sell it high to make a profit. Since real estate property appreciates over time, purchasing distressed property can earn you profits after years of appreciation.

The value of the property will soon increase. You can also turn this type of property into a rental one and earn high returns from rental income. The property may generate cash flow if you get tenants to occupy the home after renovations.  Since lenders are in a hurry to sell distressed properties, you can get reasonable conditions such as low-interest rates and closing costs and when investing in it.

What are the demerits of a distressed property?

Due to the cheap cost of a distressed property, you may face competition as every buyer tries to obtain it. You have to compete with different property investors as well as home buyers to acquire it. The stiff competition can make the bank reject your offer if you are not working with a great team.

Distressed properties also come in poor shape.  Some may need more work than others. You may incur a lot of costs from conduction plumbing and electrical repair. Distressed homes often have damaged walls while a few have problems with the foundation. Think about the condition of the distressed property and determine if it is worth investing in since you don’t want to waste a lot of time repairing it.

You should also consider the location of the distressed property. The location of any property determines its occupancy rates, demand and also the potential to appreciate. Most of the distressed homes are found in low-income areas. Even if you dedicate your money and time on renovating such property, it may never generate high rental income due to its location.

Conclusion

Once you have weighed both sides, you should implement the right strategies if you choose to invest in distressed property. Get a team of professionals that include a real estate agent as well as a home appraiser to help you plan your finances and transform the property.

Change your financial status by flipping housesChange your financial status by flipping houses

Are you tired of making peanuts from a lousy job? Join the real estate business and start flipping houses. Though people choose different ways to make money, flipping houses is a sure way of earning quick cash so that they can retire early. You don’t need a great credit rating or a lot of capital to start flipping houses.

People make millions from real estate every day and flipping houses is one of the most profitable sectors. It goes beyond buying a home and upgrading it. The secret lies in purchasing the property at a low price and selling it high. To succeed from the business, you only need to bring together a motivated seller and a buyer willing to purchase property using cash. The following techniques should help you succeed in the business.

Get the right seller and buyer

Your aim should be to find a distressed seller and connect them with a cash buyer. Choosing a cash buyer is mandatory when flipping houses since you need the transaction to close fast for you to make profit quickly. If you have rich friends already in the real estate business, make use of them to flip houses.

You can also use marketing methods to identify the right buyers. Try running Facebook ads or doing a webinar to connect with the right investors. If you don’t have a lot of time, analyse some country records to help you identify the relevant buyers.

Once you have identified buyers from country records, send out letters to them introducing yourself and laying out your intentions. Developing a lasting relationship with buyers can help you close multiple deals in time. If both the seller and buyer are ready to close the deal, you can quickly flip the contracts.

Find the right markets

Identify the markets when cash buyers are investing their money in. If you find the right markets, you can easily sign a contract to buy a home then flip it to a cash buyer. Your local market may not be the best at the moment, but some research can help you find a hot market in another state.

Get the right price

This is what helps you make money from flipping houses. Apart from the price you pay for a real estate property, you need to estimate how much money a cash buyer will pay to purchase the property from you. You can do this by estimating the retail price of different properties and identifying the mark-up gap.

Work with the right property

You can search online for different real estate properties. Consider vacant homes and do not overlook distressed homes. Homes that are about to be repossessed are a gold mine in the business. Think about purchasing a home that is about to enter foreclosure then sell it to a cash buyer.

Make use of retail channels to find the right property. You can get help from real estate agents or even from talking to people such as neighbours and friends. When you get free time, attend PTA meetings and interact with different people.

Can you sell real estate property without an agent?

Each year, real estate agents receive substantial commissions for helping homeowners sell their property. Agents make successful sales due to the use of platforms and tools that make the job easy. Though these tools were reserved for real estate agents, sellers and buyers can now access them and facilitate the process without the need of an agent.

If you considering selling your property, you can do it without the assistance of an agent. This will save you from hefty commission fees and help you learn a lot from the process. Though a real estate agent may have some information about the neighbourhood, a homeowner has a direct connection with the area. Let us look at how you can sell your property without relying on an agent.

Price your home strategically

To be a pro at selling real estate property without an agent, you must survey the market from time to time. Try to separate your emotions from the pricing expectations. Make use of online tools such as Comparative Market Analysis to help you determine how much your property can cost.

Evaluate the initial price and adjust it against other properties in the market. Compare the rest of the property focusing your attention on aspects such as square footage, interior and exterior condition as well as the age of the property.

Buyers expect a reasonable price from a homeowner who does not use an agent due to the elimination of commission fees. Ensure you set a reasonable price so that your home does not become stale in the market due to overpricing. You should, however, be ready to defend the price you are asking for based on the recent prices around the area.

Advertise your home

Buyers looking for new homes start searching different properties from online platforms. You should, therefore, advertise your home just as an agent would have done. Capture bright photos that do not have clutter and share them on social media. Be keen on the orientation and direction of the images to let the buyers have a clear picture of the available space in your home.

Landscape photos work better than portrait ones when advertising real estate property. Try to include some relevant details such as a handcrafted mantle, tiered landscaping as well as intricate backsplash to accentuate the quality of your home.

You should also add creative descriptions to go along with the images. Give accurate and detailed information to capture the attention of a potential buyer. You can also make use of adjectives that create an emotional connection but be careful not to overdo it. List your home on some on internet sites such as Zillow to get a lot of prospective buyers.

Communicate with potential buyers

Once you have the attention of prospective buyers, maintain open an open line of communication with them. Do not converse with them only once then stop. Follow up with them once in a while to try and solicit feedback. Try to address any concerns that could be holding them back from giving you an offer.