It is a fact that you need to invest money to make money. That’s especially true when it comes to real estate. In most cases, it is impossible to generate money without paying 20% as the down payment, which is a considerable amount. However, with proper planning and research, you can invest in real estate with little to no cash.
It is easier to pursue real estate investment when you have enough cash. Investing money you already have is the fastest way to achieve financial independence. This also saves you a lot of money that you can reinvest. However, just like every other business, real estate investments also start with some money. To achieve the highest return on your real estate investment, you need to have a strong will and stamina for a whole lot of hustle.
If you are wondering whether or not you should make real estate investments, this article is for you. Today, you will learn the simplest ways to invest in real estate with little or no cash. So without further ado, let’s get to the details.
Ways to Invest In Real Estate With Little Or No Cash
The following are some of the best ways to invest in real estate when you don’t have enough cash:
1. House Hacking
House hacking is one of the best real-estate opportunities for those who have little cash. In simplest terms, house hacking is the ability to generate a steady income from your house.
One of the best house hacks is to move into a small space with multiple units such as a duplex, triplex, 4-plex or more. By moving into a multi-unit house you can make income by renting out one or more units. You can rent out various parts of your home including:
- Extra bedrooms
- Basement apartment
- Guesthouse
- Extra space on your lot to a recreational vehicle
2. Lease Options And Master Leases
Master leasing is another excellent way of making money without investing cash in real estate. In this technique, you rent a property and sublease extra rooms with the permission of your landlord. This helps you earn money from the cash tenants pay as rent.
Like the majority of the rentals, you can negotiate a small upfront amount when you opt for master leasing. This amount is offered in the form of:
- Security deposit
- Prepaid rent
- Repair coverage
3. Live-In Flip House
Everyone loves house flipping shows on lifestyle TV channels. What if we tell you it is another great way to invest in real estate without spending much money? You can start with your own house and turn your property into a flip. This technique is also referred to as “Live-In Flip”. This technique is covered by one of the most profitable tax laws imposed by the government of the United States.
In this technique, you purchase a house and live there for at least 2 to 5 years. Sell the property for a profit. You can save up to $250,000 of tax as an individual and $500,000 of tax as a couple when you file for a joint tax return. This is a huge amount of money that takes years of hard work to earn.
4. The Live-In-Then-Rent Technique
The Live-In-Then-Rent technique is quite similar to the house hacking technique of investing in real estate without having a lot of money. In this technique, you move into a house, prepare it to rent, and use it as a rental once you move out. It is somewhat similar to rent-to-own homes, but your end goal is to prepare the house for rent.
This strategy requires you to purchase a modest house that can also be financially used as a rental. Similar to house hacking, you can take advantage of small-down-payment loans. However, you don’t necessarily have to live next to the tenants.
Houses are bigger than apartments. This means you can rent out different portions of the house to different tenants with families. Having multiple Live-In-Then-Rent properties will help you make a steady income for years to come.
5. Real-Estate Crowdfunding
Real-estate crowdfunding is a relatively new concept in the real estate world. It is the ideal investment opportunity for those who have very little cash to invest. This strategy enables you to invest small amounts of money in real estate property such as $1000 to $5000. Other investors are also involved in this form of real estate investment. That’s why this form of it is known as crowdfunding.
In most cases, crowdfunded real estate investments are multi-unit rental properties. In other cases, these are the loans provided to other real estate investors, also known as hard money loans.
If you are planning to make crowdfunded real-estate investments, we would suggest you be very cautious. That’s because this strategy is relatively new. So are the legal structure and companies associated with it.
6. Real Estate Investment Trusts (REITs)
Another real estate investment approach that is quite similar to mutual funds is Real Estate Investment Trusts or REITs. Buying stock in a REIT is the same as owning a small portion of the commercial or income-generating property. In this real estate investment strategy, a team of managers is involved. This team selects and supervises the investments in real estate for a fee.
REITs are a form of passive investment just like crowdfunding. However, the return on investment is much more liquid. You can sell a REIT quickly, much like a mutual funds or stock when the market conditions are favorable.
Real-Estate Discount Coupons and Promo Codes
If you plan to invest in real estate you should also look for opportunities to save as much as you possibly can. Many real estate companies offer discount coupons and promo codes on their social media pages. Latest coupon statistics show their redemption is on the rise as more firms are beginning to offer them. You should make the most of this opportunity.
Wrapping Up
Choosing to invest in real estate with little to no money will be very challenging. However, your return will be worth the effort. Choose the strategy that suits your lifestyle and budget. By combining the right approach with a lot of hustle, persistence, and energy, you can make the real estate investment work for you.
We hope you found this blog post How You Can Invest In Real Estate With Little Or No Cash useful. Be sure to check out our post Learn About Real Estate Investment And The Strategies To Make Money for more great tips!
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