How to Invest in Real Estate with No Money Down?
I’ll get this over with quickly. There is no such thing as Investing in Real Estate with No Money Down. Ok. Ok. Sure, I’ve seen deals and done deals where the investors didn’t put any capital into a deal. So, yes, in one sense it is possible. But, its not like it sounds. You can’t just walk off the street and get into real estate investing and make money without having money to put into a deal. It happens so rarely that it’s pretty safe to just come out and say that it doesn’t exist. Also, when it does happen, it requires very intimate knowledge of the business and the market your in, that its not something a new investor can do anyway. I’ve seen so many people get excited by this concept and waste time and money pursuing all manner of these no money down schemes that I just have to put it out there this blatantly. It doesn’t exist. Don’t waste your time.
BUT, if your really looking for a way to get into real estate investing and you don’t have any money or ability to finance a deal, then there are ways to get started. What you really need to consider is Value Added Participation.
Value Added Participation - This is the least talked about area of real estate investing, and the least glamorous, but is the one I personally think is the best place to start if you are really, truly interested in real estate investing in the long run. This type of investing also doesn’t require money. It requires time, labor or expertise. You find this type of investing in all aspects of real estate. There are development consultants that help investors and developers bring large projects to market. These consultants earn a fee or a equity stake in the project. There are contractors who do the rehabbing for investors. They get paid for their input on the deal. Most of the time, its a flat fee or percentage, but I have seen many scenarios where contractors partner up with money investors and make great teams. Also, their are agents and brokers, who find the deals for investors. They typically earn a commission, but again, a partnership arrangement works well to. So the idea is really simple. To create value in any business, you have to bring something to the table. If you don’t have money, then bring your expertise. Whatever it is that you like most about real estate, learn as much as you can and master that part of the business. If you like fixing up properties, then learn the contracting side. Become an expert at it, maybe start a business contracting for other people and use that as a way to learn more about real estate. If you like finding deals, then look into getting a real estate license, and becoming an agent. What better way to learn how to find deals for yourself one day, than to find them for other people and earn a commission. I know, your saying that this doesn’t really sound like investing, but it actually is. Remember investing is “putting something in, with an expectation of getting something out.” No one said it was easy.
