While I plan to purchase my first home in a little over a year to eventually rent out, I am wondering if any of you have idea's on different ways to invest in real estate with minimal cash before that time. I love real estate in general and would like any creative ideas you have which will allow me to make long term gains and why you recommend them. I would love to hear anything you may have done before and suggest, anything which will allow me to invest long term in real estate with minimal stating cash as I am recently out of college. Thank you all!
I used a hard money strategy to purchase 20 homes with little to no money down.
Another thing you can do is learn to wholesale by driving for dollars.
Welcome to BP!! I am originally from Sioux Falls, SD so I went to Mankato many times when I was younger!!!
@Curt Davis Thank you for your reply! Can you elaborate on what you mentioned regarding a hard money strategy as that is the first time I have heard of this. I had heard about wholesaling a bit however; I find tons of articles on why not to do it which had me stop looking into it quickly. I will check it out more in depth! You called it, MSU was my school. Nice to meet you!
Here is a simple example on how I structured my deals:
70% Loan of $70,000 private loan
$60,000 purchase price ( as-is from bank )
$1,500 closing cost
$3,500 5% hard money lender origination fee
The $70,000 covered all my purchase, rehab, closing and lender fees.
I will pay 1% monthly interest only until my bank puts bank financing in place and I pay the hard money lender back. This usually takes 2 months to do so I will be out of pocket about $1,400 and then another $500 appraisal fee.
Home appraises for $100,000 so the lender will give me a 75% refinance. That 5% or $5,000 is covered in the refinance as I only borrowed 70% but refinanced at 75%.
Hope this was not too confusing.
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