How to Invest in real estate with no Money

 

Investing in real estate can lead to much desired financial independence. If you want to earn a consistent & reliable passive income, you need to start investing in real estate. People interested in real estate often have a question in mind about where to get that money to buy a property.  

While investing in real estate with no money down offers numerous benefits and here is how you can score capital for real estate investment 

Consider Partnership

real estate investment

If you don’t have sufficient capital, then find a partner who does. Someone who knows Pakistan’s real estate market, and can help you steer in the right direction. There are many perks of partnering up, like taking advantage of someone’s existing network of lenders, contractors, buyers, etc. On the flip side, it’s also daunting, because partnership comes with its risk of dishonesty and incompetence. It’s important to keep in mind that having a partner means you both have to be transparent about your assets and liabilities. It’s a real possibility that your partner could run off with all your money, borrow under the establishment’s name (without consent), and expose you to giant financial risk.  

Therefore, it’s extremely important that you undertake a business venture, with someone you really trust. If you have any red flags about your partner, then it’s probably a sign that you should keep looking.

Family, Friends peer to peer loan


 

Peer to peer known as P2P in this method investors loan money to one another. In foreign countries, the crowdfunding market takes place via online services. Potential investors and individuals are matched, requirements are fulfilled and the loan is approved. It is an affordable procedure with low overhead costs than conventional mortgages. There are a few aspects that need to be checked while using the peer to power platform such as:

  • Research and find the right platform 
  • Select the equitable investor.
  • Check data security features 
  • Study the privacy policies regarding personal data
  • Assess the requirements of investors and lenders 
  • Inquire origination fees and payback periods

 

Crowdfunding is becoming popular. According to Allied market research, the global peer-to-peer market is likely to hit over $460,312 million by the end of 2022. It is a better option when buying a house as you can still get a loan despite having a perfect credit score 

Flip Homes Into Rental Properties

A great way to garner extra cash is by flipping your homes into rental properties. First, buy a house, then make repairs, followed by putting up the listing on the market —  rent or sell. And finally, sell it at a good profit margin. This way, you still maintain ownership.  

Tips to rent your house:

  1. Conduct a real estate market research
  2. Find the right tenants
  3. Get your property evaluated
  4. Prepare a legal agreement through a professional

Private Investors/ Hard money lenders

private investors hard money lenders

People who have an excess of money to lend are known as hard or private investors. As their name implies they are not associated with any financial institutions and investment banks. They are the most popular and easiest source of capital investment you can go for. Private money owners are licensed to loan money to people in need of real estate development. You can use the finances obtained from private investors for two purposes:

  • Buying a new property
  • Refinancing a property

These investors comfort the lender by granting them full access to money or a loan, without the perfect credit score. The private investors usually see if the property is worthy of investment but they have some drawbacks like they mostly ask for 12 to 15 percent interest that is much higher than the traditional banks and other investors. The banks on the other hand take around two to three months to provide funds to the applicant. Therefore the private money investors are much easier to deal with so it has made this process trouble-free.
 

You can opt for hard or expert money lenders if you need money for:

  • Startup real estate business 
  • The major restoration of the existing property
  • Quick flip or wholesaling real estate 
  • Low credit score

Traditional investment bank financing

In investment bank financing loans are provided for all kinds of corporations, which helps to aid mergers, and guides issuers about the placement of stocks. Bank financing is one of the most well-known methods used to raise capital for real estate. The banks usually approve mortgages or loans if the company has a stable income, no debt, and a good credit score. Investment banks check the applicant’s credit histories and assets are thoroughly evaluated before approving the money. Different documents such as recent payslips and bank statements are required for investment bank financing. Let’s assume you need investment capital in Pakistan, many banks cater to the needs by allotting the loans such as HBL home loans,  Meezan house financing, MUSKUN home financing, and MCB home loans. 

 

Conclusion

It is not that hard to raise capital investment as much as it seems. If you have a proper plan and know what lenders want. You can secure the chances of investment by satisfying their demands. 

You can invest in real estate with very little money and can earn great returns. Investing is about finding the best businesses that go hand in hand with what you want to gain out of it. It is not that hard to raise capital investment as much as it seems. If you have a proper plan and know what lenders want. You can secure the chances of investment by satisfying their demands.