Invest in Real Estate with Someone Else’s Funds

Real estate can prove to be rather lucrative as far as investment opportunities go. However, despite its attractive returns, many people shudder at the prospect of investing in it. This is because in order to start out with real estate investment, a huge amount of capital is required. You can invest in real estate, and in fact, it’s possible without you having a huge chunk of money for the purpose.

Here are a few ways you can invest in real estate with someone else’s money.

Consider the Lease Option

Leasing property basically means going for a rent-to-own option. This is ideal for situations when you don’t have cash on you for the purposes of buying a property. What you do instead is to find a home owner who is willing to lease out their property to you, with an agreement of buying it as an option.

But wait, why agree to the last part in the first place, especially since you don’t have the money to buy the property? An experienced real estate investor knows that this property will be sold to another buyer during the time you’re leasing it.

In short, you can kill not two but three birds with one stone – you help the seller, the buyer, and during the whole process, yourself, without having to pay the exorbitant costs associated with homeownership.

Find an Existing Mortgage

Consider finding someone who can let you take on a current mortgage. Continue to make payments on the house even if you don’t have credit to take out a loan for yourself. You can also pay cash as down payment for the new place. However, do bear in mind to consult the relevant local laws before you take over a current mortgage in your area. Contacting an experienced attorney can certainly help.

So how can you get a loan when you really can’t apply for one in the above scenario? You see, motivated sellers are more likely to give you a mortgage on their property since they fear a looming foreclosure. They might also have other reasons for selling their home fast, thus ensuring that you get a return on your investment as soon as possible.

Wholesale Deal

When you are planning to look for a property on wholesale value, you usually get it under contract. This contract stipulates that you can buy it without any cash or financing options in place.

Once you have this contract, you want to make the most of this opportunity to invest in real estate. You start searching for a buyer. When you finally find one, you can assign them the contract for a fee. Basically, your role is to find a willing buyer who wants to take the deal before you close it.

This option is good since you are not in charge of arranging the finances or cash for buying the place. Instead, it is the obligation of the buyer once they get the contract. Usually, real estate investors can make a few thousand dollars this way.

Private Lenders Can Help

You can also consider going for a private lender (ie. Not a bank or financial institution). These lenders can extend you cash or credit in order to buy your first property. You can promise them a percentage of the profits when you sell the place you’re buying with that money.

Some advantages of this approach are that your lender doesn’t have to know anything about how to invest in real estate. And yet, they can still get some share of the spoils once you land a deal. You may need to explain the procedure to them and convince them why they should bet on you. Creating a detailed proposal or presentation helps so they know how comfortable you are with the real estate market.