How to Buy an Investment Property with no Money

How to Buy an Investment Property with no Money

Whatever you buy to make a profit is an investment. Real estate has been one of the oldest assets people buy, and the practice is still in existence today.

What is an Investment Property?

Any asset or real estate bought to be resold or used for profit is an investment property. It could be purchased by an entity or a group of investors for long or short-term investment. In the case of investing in real estate, it can be refurbished and resold at a rate higher than the cost price. Investment property could restore you financially when you go broke, but the big question is; can investment properties be bought with no money?

Yes, it is possible buying an investment property with no money. This means you are buying with little or no money from you at the main time. 

Recent Financial Report of Real estate investment in Nigeria, United Kingdom and the United state of America

In Nigeria, the business of real estate investment is very lucrative. It was proved statistically that real estate boosted to about 3.85 percent growth in the second quarter of 2021, representing its peak in six years amidst the high cost of materials.

In the UK, real estate investment has contributed to development by upholding 7% of all economic activities, even though experts predict inflation by 2023. 

In the US, a significant increase of 19% was noticed between 2020 and 2021 in this sector, which increased by more than 15% before the end of 2021.

This proves the business to be a high money-yield investment for interested investors.

How To Start A Real Estate Investment Business 

1. Having a Business Plan

Understanding a business plan, it’s essential before starting up any business. Real estate is diversified. They are estate buyers, sellers, agents, and developers, so you have to plan on which niche you want to belong to or how you want to operate in this niche. In Nigeria, estate agents recommend available estates to potential buyers and get their commission after payment.

2. Register Your Business

After planning your business and starting up, the next step is registering your real estate investment business. This can be done with a Corporate Affairs Commission (CAC) to get a certificate of incorporation in the real estate business. Investors could also hire a lawyer to register their business; yeah, the business should also be insured in case of future losses.

3. Brand and market your business 

You have to give your business some authenticity, which builds confidence in potential buyers to patronize you. Marketing is also important to create awareness; marketing could be done online, through a newspaper, by word of mouth to enable people to know about your business’s available properties to buy or sell.

Steps on How to Buy an Investment Property With No Money

Seller financing: This is an investment agreement where the seller or property serves as the primary loaner and allows the buyer to pay later or installments over an agreed period. In seller financing, there is no middleman or a traditional form of getting loans from a bank or mortgage firm, and this could be one way to owning property or investing in a property with no money.

House Hacking: this is an investment strategy where house owners who live in multi-unit buildings rent out some parts of the building, only to live in a single unit, and when they are paid for rented apartments, the money is redirected into payment of any investment property. The house hacking method uses any space ranging from a garage and office apartments or any space that ensures shelter for individuals ready to pay you for it. House hacking is a smart way to secure an investment property or become a landlord. It eases payments for any investment property.

The BRRR Method: This is a buy, renovate, rent and repeat system of investments. Here, an investor buys a house that needs to be renovated at a cheaper rate because of its sad condition. After buying the house, it is being renovated and rented out to individuals and the rental income is being refinanced by investing it in a property. At the same time, the process is repeated to secure more properties. This is practiced mostly in the UK to secure an investment property.

Partnering with a Co-borrower: Partnering with a co-borrower entails associating with a business partner who could be a friend or colleague or a family member who shares the responsibility of the cost and profits of any investment. The investors bring a shared amount of money invested in a property, and they also share equal responsibility for repaying a loan. After the property is bought, the two investors share the profits.

Leveraging: This is when an investor gains a high return from the property by borrowing capital for the investment. Some investors fund the down payments with their money and borrow the greater percentage remaining. When considering leveraging as an option, the downsides or risks involved should also be considered for investments that do not provide a high return.

Private lenders: Private lenders such as colleagues, friends, the family who trust your financial record. Most private lenders charge low interest based on familiarity with other lenient terms and conditions.

Home Equity Line of Credit (HELOC): This is the kind of loan you borrow according to the value of your home. The interest loan accompanied by a home equity line of credit is lower than other loans. When the equity in your home secures an investment property, your home becomes a collateral investment unable to pay back; his home takes the place of his debt, but if he pays back, he clears the debt and his home from being collateral.

Conclusion

Real estate investments are imperishable, even though conditions differ from one individual to another.

Are you looking for a good investment to be a part of? Lack of money should no longer be an excuse. You can give it a shot and smile in the end.