Many people with an interest in purchasing investment property may find themselves daunted at the thought of coming up with the initial down payment. A lack of cash flow can seem like a big hindrance to a potential investor, but it doesn’t have to. For more, you can visit website https://svngll.com/.
Many people with an interest in purchasing investment property may find themselves daunted at
the thought of coming up with the initial down payment. A lack of cash flow can seem like a big
hindrance to a potential investor, but it doesn’t have to. There are many creative ways to purchase
an investment property with little to no money down.
Borrow the Money
One simple way to come up with the down payment for your investment property is to borrow it. If
you don’t have family members or friends who are willing to front the money, look for a lender who
will allow you to finance it with a low interest rate.
Utilize Your Personal Property
If you are a homeowner, this could give you some serious leverage to help you break into the world
of real estate investment. Consider taking out a HELOC (home equity line of credit) or a second
mortgage against your own personal property to come up with the down payment. Pay it back in
affordable monthly instalments.
Assume the Existing Mortgage
Oftentimes, the current owner of the potential investment property may be willing to transfer their
current mortgage to the buyer. This is particularly helpful if the seller needs to unload the property
quickly or if it has entered foreclosure.
Figure Out a Trade
Another creative way to come up with a down payment for your investment property is to find out
what you have that the seller needs and use it as leverage to help you secure a deal. Anything with
cash value can be potentially used as an enticing down payment. This may mean cars, boats,
jewelry, motorhomes, collectible items, or even land that you own free and clear. If you’re not sure
what you might have to offer, ask the seller.
Lease to Buy Option
When searching for the right investment property, look for sellers who are willing to negotiate a deal
where you can rent with the option to buy. Typically, the terms of this sort of deal will allow the
buyer and seller to negotiate a monthly rent amount in exchange for the use of the property. A
portion (or sometimes all) of this monthly amount will be applied towards a predetermined selling
price agreed upon by both the buyer and seller. This may even afford the buyer time to build equity
within the property so that they may secure their own loan later down the line.
This may be a little trickier, particularly if your credit is less than sufficient, but it is a viable way to
secure your investment property. While your interest rate will likely be considerably higher, if you
have the credit to make this type of negotiation, it could be the answer you are looking for.
Use Your Skill Set
Much like your personal property can be used when negotiating a deal for investment property you
can also put your skills to work for you. If you have a tradeable skill of any value, consider using it to
your advantage. Examples of a lucrative tradeable skill set may be something like accounting,
carpentry, legal services, et cetera.
Get a Partner
If financing an investment property is creating more of a headache than it needs to, consider
reaching out to others with the same interests. Pooling your funds with other investors is an easy
way to take out some of the stress, as well as share the responsibilities that come with property
ownership. Obviously this can also come with its own set of problems, being that more investor’s
means more ideas, opinions, and personalities.
Offer to Take on Seller’s Debt
If the current owner is selling their property to help pay off their own debt offer to roll their debt
into the purchase price in lieu of a down payment.
Negotiate the Terms
When it comes to any type of investment property, negotiation is imperative. If the down payment
is too high, you may consider asking for an adjustment. You may also offer a sale price that is higher
than asking in return for the removal or negotiation of the down payment.
Looking for Investment Property in the Baton Rouge Area?
Don’t let a lack of cash flow stop you from finding the perfect commercial property investment. Use
the tips and tricks above to get creative with your financing and then, call us! At SVN | Graham,
Langlois, and Legendre, LLC, our team of dedicated Advisors has a proven track record of giving our
clients a high quality experience from start to finish. Take a look at our broad selection of properties
today and call us to get started!