One of the biggest hurdles for new real estate investors is the down payment. However, you don’t always need a 20% deposit to get started. Here are three creative ways to fund your first investment property.
1. FHA Loans (Low Down Payment)
If you plan to live in one of the units of a multi-family property (up to 4 units), you can qualify for an FHA loan with as little as 3.5% down. This is a popular strategy known as “house hacking.”
2. Seller Financing
In some cases, the seller acts as the bank. You make monthly payments directly to them instead of a traditional mortgage lender. This can be a win-win if the seller wants a steady income stream without the hassle of property management.
3. Real Estate Partnerships
If you have the time and expertise to find a great deal but lack the funds, consider partnering with someone who has the capital but no time. A joint venture allows you to split the profits and the responsibilities.
Don’t let a lack of savings stop you. With the right strategy, your first deal is closer than you think!