10 Best Ways To Invest In Real Estate With Little Or No Money

By Getrude Mathayo / Published May 16, 2023 | 1:45 pm

KEY POINTS

Real estate is a great way to build your wealth over time by purchasing properties that are in high demand with low supply. You can also get income from rental properties if you rent them out and make sure that these are also in high demand with low supply.

KEY TAKEAWAYS

Real estate partnerships are common for investing in real estate with little or no money. If you want to invest in a property, but the price tag is out of range, then an equity partnership may be what you need. An equity partner is an individual whom you bring into a transaction, to help finance a property.

Real estate investment is one of the best ways to earn money in Kenya. It’s a long-term investment and can be used as collateral for loans. It also helps you build wealth over time by increasing your assets and reducing debt obligations.

Many benefits come with investing in real estate, including low risk and high returns! It’s a good investment for the long, short, and medium terms.

Real estate investments can add diversification to your portfolio, and getting into the market is easier than you might think. It’s certainly easier to get started in real estate if you have cash. And if you eventually want to reach financial independence the fastest way, you do need to save a lot of money

You will still need little money for making a down payment when opting for financing real estate through conventional loans.

Any type of real estate investment requires some amount of capital and is also highly cash flow dependent to call it a profitable investment. Investing in real estate by using others’ money is the stamp of authenticity for some of the most successful people in the real estate investing business.

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Purchase Money Mortgage/Seller Financing

The first proven way to invest in real estate with no money is through seller financing. When buyers are unable to secure a loan from financial institutions, they may opt to seek real estate financing from the sellers. With conventional real estate transactions, the buyers will provide the sellers with the cash, to gain ownership of the property.

Real estate investment trusts (REITs)

If you want to wade into real estate, investing in a real estate investment trust (REIT) will provide exposure to the market without the time and cost commitment of buying your own property. REITs are companies that own, operate, or finance properties and real estate ventures. Like mutual funds or exchange-traded funds, they own not just one, but a basket of assets.

Hard Money Lenders

If you have no money to invest in real estate you can opt for hard money lending as a viable funding option. Instead of coming from a bank, the funds used in real estate investment will come from groups or private individuals. Since these types of loans do not necessarily need to go through corporate procedures, they tend to have fewer qualification requirements.

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Real estate limited partnerships

A real estate limited partnership (RELP) provides investors with a diversified portfolio of real estate investment opportunities, allowing you to merge your funds with other investors to buy, lease, develop, and sell properties that would be hard to manage or afford independently.

Microloans

There are a variety of new financing options that have opened up the market for new real estate businesses to profit. As the name suggests, microloans are normally geared towards startups or newer businesses, which require resources to generate further growth

Become a landlord

One classic way to invest in real estate is to buy a property and lease it, or part of it. Being a landlord can come in many forms. The first is to buy a single-family home and rent it out, a strategy that will only generate income if overhead costs are low. If your tenant’s rental payment doesn’t cover the mortgage, insurance, taxes, and maintenance, you’re effectively losing money.

Forming Partnerships to Invest in Real Estate with Little Money

Invest in your own home

If you want to invest in real estate, look closer to home – your own home. Homeownership is a goal many people strive to achieve, and rightfully so. Residential real estate has had its ups and downs over the years, but it generally appreciates in the long term.

Become a Real Estate Agent

To begin learning and earning money, you could start a side business or a full-time career as a real estate agent. While technically not investing, it’s a great way to learn about real estate transactions and the overall real estate market. Later you can build a portfolio and sell on behalf of other companies. Over time, you will get resources to invest in real estate

House Flipping

House flipping refers to buyers who purchase distressed properties, fix them up, and then resell them for a profit. Spending money to buy and fix a place with little or no money is challenging. It would be best if you then turned to hard money lending. You can find lenders who will loan you the money using the property you are flipping as collateral.