No one can make something out of nothing, right? That’s the outrageous stuff of alchemy and magic, and property investment is all about hard cash. Luckily, that’s not the case. Plenty of people get started in property investment with zero dollars, and although having no money can make it more difficult, it’s surprisingly not impossible.
Having the ability to recognise and take advantage of other people’s money is a key characteristic shared by the most successful beginner property investors out there. Don’t be put off – you’ll be bringing your own value too.
Below are two methods you can consider using to purchase properties without breaking the bank or depleting your savings.
This is one of the most common methods taught to those who are starting in property investment without much financial capital. In the world of real estate wholesaling you find discounted properties and then assign the contract to a potential buyer. You’ll be compensated for doing so, and best of all, you do not need a high credit score or large sums of money to put down. Find out more about becoming a wholesaler (also known as a birddog) here.
You have value beyond the cash in your pocket. Believe it or not, partnerships are a common path in real estate and property investment because what one investor might be lacking, the other can make up for. You might do all the managing while your partner can use their credit score and working capital to provide the funding. Or, you can invest with a building contractor who knows all about carpentry, plumbing, and electrical matters while you again run the management of the project. You just have to find out what value you can bring to the table, and it doesn’t have to be money.
Make sure you write up a contract that clearly defines goals, roles and risks to make sure everyone knows what their job will be and how the profits will be divided. If your partner is in place strictly for financial support, make sure you retain all control over the day-to-day management of your investment.
Once you make a profit on the sale, you will have the down payment for your next real estate investment.
Don’t Hold Back
Many people who would like to get into property development don’t because they’re either short on funds or unable to get the financing needed to make a large purchase. The truth is that those aren’t reasons that should hold you back. There are ways to do it and all you’ll need is take hard work and sacrifice, which everyone is capable of.
Also, even if you don’t plan on using a lender you should go ahead and speak with one. Since lenders work with these situations day in and day out, they can help you get your finances in order to be a better investor. By discussing your finances with a lender you can also improve your credit, thus making you more attractive to partners and/or other lenders in the market.