We all know the multifamily real estate benefits like more cashflow, tax breaks, comparatively easy property management, etc. If these benefits have attracted youandyou don’t have sufficient funds or no money, this blog is for you.
You may be thinking about how is it possible to invest in multifamily real estate with little to no money. It is simple, you’ll have to be creative with your financing strategy.
Yes, some properties will require heavy down payments. But you’ll have to find a way with your innovative finance strategy. In this article, I’ll talk about how you can invest in multifamily real estate with little to no money at all.
4 Ways to Invest in Multifamily Real Estate with Very Little Money
1. Find an Equity Share Investor
If you’re on a low budget, this is one of the best strategiesto invest in multifamily properties. You’ll have to find an equity investor and convince the investor to invest their money in the property. When you have an equity share investor, you’ll have to share a certain amount of cash flow with the investor.
For example, you can ask for 120,000 USD from the equity share investor, and in return, they will get 40% of the property. This will allow the equity share investor to get 40% of the total monthly cash flow and selling value.
2. Look for Hard Money
Hard money loans are given by a person or an organization, and it is given based on the value of the property. Unlike traditional loans, it’s not given on the basis of the credit score. However, as there is a high risk for the hard money lender, the interest rate is usually very high compared to a traditional mortgage loan.
3. Home Hacking
If you’re not familiar with the term “house hacking”, I can assure you that it’s certainly not about trespassing into someone’s information or property. The term house hacking means renting out the unused rooms of your house and generate cashflow.
You can easily do house hacking by using AIRBNB. However, while renting your house, you’ll have to know about the laws and regulations of your state or area. Because some states allow short-term rentals, and some don’t. If you live in a tourist area or city, chances are your city or state will permit such rentals.
If you watched the popular TV show Silicon Valley, you are probably familiar with this term. In crowdfunding, instead of asking a single investor, you’ll be asking various investors to invest in the multifamily real estate property. The term crowdfunding has been popularized by sites like the Go Find Me and the Kick Starter. In crowdfunding, you won’t need any capital, but you’ll require strong pitching and convincing skills. You’ll have to convince the investors to why they should invest in your project and how they can benefit from it.0