4 Real Estate Investment Strategies That Don’t Require Borrowing
When looking to get started in real estate investing, you want to look at four different real estate investment strategies that do not require you to put up any of your own money.
Wholesaling
The first one is what everybody calls wholesaling.
That is where you are going out and you are finding properties for other people, for people that are doing fix and flip
This is really a good way to get started with real estate investing.
This is where you end up doing a lot of research for other people. These other people will take your properties, pay you for finding these properties, and do whatever they want with them. Most of the time it’s fixing and flipping them. Sometimes it’s fixing and holding them.
So that’s called wholesaling.
The reason it’s called wholesaling is that you are buying properties that are really reduced price at what it’s normally referred to as a wholesale price. And then you are flipping them to a cash buyer. You can usually get about $5,000 to $10,000 for a wholesale deal.
Bird Dogging
Another easy way to get started is doing what’s just doing what’s called bird-dogging real estate investment strategy or referrals.
The difference between bird-dogging and wholesaling is on wholesale you actually put the property under contract.
With wholesaling, you have a contract to purchase a property, and you assign that contract to the owner.
With bird-dogging, all they are doing is they are providing an address or a person that’s looking to sell a property to a cash buyer, which is somebody who is looking at acquiring a property.
That is what’s called bird-dogging. You are just going out and you are looking for properties. You are not putting the properties under contract.
A bird-dogger does not make as much money as a wholesaler.
They can make about $500, $1,000, or maybe $2,000 for referring properties to these cash buyers, to these fix and flippers. A referral or a bird dogger could actually refer properties to a wholesaler.
So you can build a network of people.
Seller Financing
Another way you can buy properties without any of your own money is by doing seller financing.
Seller financing is, where you get the vendor to hold back a mortgage, either a first mortgage or a second mortgage or you get the seller to assign you the property, subject to them staying on the mortgage. That is called subject to.
So, seller financing is the third way.
Lease Options
The fourth way is lease options
The lease option is where you are actually leasing the property from the seller with the expectation that you are going to buy it sometime in the future. You have the option to purchase that property.
What you would do is you would get the seller to stay on title for two to three years, depending on the term of your lease option.
Then you can lease option that property to a tenant-buyer. So you would become a middleman in this situation and that is what is called a sandwich lease because you’re sandwiching yourself between the seller and the tenant-buyer.
Summary
In conclusion, those are the four ways in which you can acquire properties without using any of your money. They are bird-dogging, wholesaling, seller financing, and lease option.
