There is a false assumption that someone interested to invest in real estate market must have a bulky bank account. It is false because you can invest in real estate even if you are not loaded with cash. This statement may take many by surprise but it can be done, if done neatly.
If this thought makes you up and moving, you should bear in mind that you must be originative in your approach and should try to come up with multiple ways to make use of other people’s money to bill your investment. Some such creative investment methods are covered in this article.
You must have heard of escrow account. Similarly, there is also a term as double escrow, which means selling and buying property simultaneously. In this, the money received from selling a property is used to bill the purchase price of another property, where the selling price is higher than the purchasing cost which becomes your profit. Thus, in a double escrow, profit comes in account only after both parts of the dealing are done simultaneously. It can get risky or you might end up in a jam, therefore, it is mandatory that you must assure both the deals prior to going into this type of transaction.
Here you have to make use of your marketing skills and persuade him in the best possible way that you are going to take over his mortgage for a given span of time until you find an appropriate buyer of his property. As soon as the property is sold, the money can be utilized to pay off the mortgage. The difference in the amount becomes your profit.
DUE ON SALE clause in loan agreement states that when the title of a property is shifted, the lender enjoys the right to ask for full settlement of his loan i.e. it is his choice whether to ask for full settlement of loan or not. If you plan to take over a mortgaged property and make apropos payments, there is every possibility that the lender will not push his right of “due-on sale”. Thus, going this way you can purchase properties without having to fuss about going through a credit check. The properties thus obtained can later be sold to potential buyers.
Trying out any of the above mentioned options can be very tricky and stressful in the beginning and you might get disheartened as well. However, you would get confidence and courage with time as there are astonishing opportunities of making big money in the real estate market without money. The key is to get going and act smart by planning a workable real estate investing strategy and not to get discouraged by initial failures.