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Starting out in todays market

Carline Lafaille
Posted Feb 10 2024, 10:38

Hello All,

I am very new to real estate investing, I have a full time job making 47k a year. I have no debt, excellent credit but I have no savings.

I heard there are ways to buy properties with little to no down payment. 

For example, I heard you can use an SBA loan to put down on a property as long as you prove to the bank that you’re capable of paying it back, without using the business.

I also heard if you finance through a seller, you can get them to increase the price of property instead of paying the down payment. I heard that this can be beneficial for the seller cause it can help them avoid tax obligations.

Is this actually possible and has anyone here actually bought a property with no money down? If so, can these methods be applied in today’s market? 

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Samuel Diouf#3 New Member Introductions Contributor
  • Real Estate Agent
  • Columbus, OH
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Samuel Diouf#3 New Member Introductions Contributor
  • Real Estate Agent
  • Columbus, OH
Replied Feb 10 2024, 13:06

I would try to save up a little and start with 5% down house hacking. Buying real estate with no money down isn't the best beginner friendly strategy, and I have seen people take large losses doing so. If you don't have any money, look into becoming an agent and working with other investors. 

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Carline Lafaille
Replied Feb 10 2024, 16:28
Quote from @Samuel Diouf:

I would try to save up a little and start with 5% down house hacking. Buying real estate with no money down isn't the best beginner friendly strategy, and I have seen people take large losses doing so. If you don't have any money, look into becoming an agent and working with other investors. 

I definitely want to work with other investors but I’m not interested in house hacking. I want to buy commercial properties (self storage units, parking garages, multifamily apartments etc.) 

I am very interested to know how people have taken large losses through these strategies, if you can share a little more about that? 



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Wale Lawal
  • Real Estate Broker
  • Houston | Dallas | Austin, TX
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Wale Lawal
  • Real Estate Broker
  • Houston | Dallas | Austin, TX
Replied Feb 12 2024, 05:50

@Carline Lafaille

Buying a property with little to no money down is indeed possible, and there are various strategies you can explore. It's important to note that while these methods exist, they may not be suitable for every situation, and the feasibility can depend on factors such as the type of property, the seller's willingness, and your financial qualifications. Here are a couple of methods you mentioned:

Seller Financing: In this scenario, the buyer funds all or part of the purchase price with the seller serving as the lender. Instead of giving the vendor a standard down payment, you bargain over the conditions. The details of this agreement, which may be adjustable, may include interest rates, loan durations, and repayment plans. Locating motivated vendors who are amenable to this kind of agreement is important.

SBA Loan: Although SBA loans are mostly intended for commercial uses, real estate transactions may occasionally be funded with them. The conditions and availability, however, might change. It is imperative that you speak with a lender that has been approved by the SBA in order to fully grasp the requirements and explore your options.

Creative Financing: You may buy a property with little money up front by using a variety of creative financing techniques, including partnerships, subject-to transactions, and lease options. In order to establish a win-win situation, these tactics frequently entail negotiating conditions with the seller.

Renting out the other units in a multifamily property while residing in one apartment is known as "house hacking." You can enter the real estate market with less money up front if you can use this to make rental revenue and possibly pay for your living expenditures.
It is important to employ these tactics with prudence and meticulous research. You may also improve your chances of locating innovative financing by networking within the real estate industry, forming relationships with motivated sellers, and real estate experts.

While these methods are possible, the current real estate market conditions, local regulations, and individual seller circumstances can impact their applicability. Consulting with a real estate attorney, financial advisor, or experienced real estate investor can provide personalized guidance based on your specific situation and goals. Always conduct thorough research and consider seeking professional advice before pursuing any real estate transaction.

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Kyle Spearin
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  • Investor
  • Boston, MA
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Kyle Spearin
Pro Member
  • Investor
  • Boston, MA
Replied Feb 12 2024, 06:55

@Carline Lafaille I'd checkout the NACA program in your situation.

In my opinion, though, it's also super important to have money in the bank as reserves. Learn how to earn more, grow your savings, and then invest. The reason is so that you can repeat the process and build your financial IQ on solid ground to grow faster in the future.