Do you really need cash to be a real estate investor? Yes and no.
While you can start investing in real estate with no cash, you will find it very challenging.
With a little cash, a few hundred dollars, it will be much easier for you to start your real estate investing business.
What types of investments can you make with little or no cash?
bird chase
You can be a bird dog and find potentially motivated sellers to turn over to another real estate investor who is willing to take the next step and negotiate with the seller to buy the home.
Your expenses as a bird dog are in finding potentially motivated sellers.
Wholesaler
You can be a wholesaler and find deals and put them under contract and then find another investor or retail buyer to buy the houses from you for more than what you have under contract.
Your expenses as a wholesaler consist of finding motivated sellers, putting up money to control the property (required deposit or option consideration), and finding your investor or retail buyer.
What if I have some money (a few thousand dollars or more)?
With a few thousand dollars, you could consider a few offers with no money down, being especially careful not to commit to making payments on the house until you’ve lined up your tenant, buyer, or tenant-buyer.
Your cash needs on buying and selling homes with no down payment are the costs of holding and marketing and not necessarily the down payment.
For example, many times when we buy a house “subject to” existing financing, where we agree to make payments on the seller’s existing mortgage, we are not putting any money down. We simply agree to make your existing mortgage payments.
Even if the seller agrees that you will only start making payments when you find a tenant or tenant-buyer, you may still have marketing costs and should the property become vacant, you should be able to make the mortgage payments. while he finds another tenant. holder-buyer of gold.
You’ll notice that I didn’t include buying homes “subject to” existing financing in the little or no money category. Although we can often buy “subject to” homes with no down payment, we need to have some cash on hand for marketing, repair and maintenance costs.
What if you are interested in buying houses with new loans?
Yes, I think you should have some reserves set aside (just as your lender usually requires) to account for vacancies, marketing, and maintenance.
So while you can start investing in real estate with no money, it helps to have a little cash on hand. I would suggest having access to some money if you plan on owning a rental property in any form.
