01 Feb

How To Invest In Real Estate Without Buying A Property

Nowadays people are finding it hard to invest in the real estate market without money down. It seems everything is a problem when it comes to the economy and buying a property. And we all know that there are problems due to recession and Brexit, and many people believe that there is no chance for starting a new business nowadays. However, this statement could not be more erroneous, with so many repossessions and home auctions taking place daily across the UK.

Most successful real estate investors operate because they are scare mongered into believing there are no opportunities. not least because it makes perfect financial sense as it limits their own financial exposure in the deal. And this is exactly, in principle at least, the way you will have to learn to operate in order to make your own real estate investments pay off, instead of looking for a quick sale.

Any other way requires a huge risk in terms of injecting massive amounts of your own equity into a deal before you can even close it which then means that you have multiple exposures and need to close all deals just to begin to recoup your money. No sane real estate investor operates that way and you shouldn’t either.

There is a whole process where you need to learn how to find investors and what will convince them, but basically, the scenario goes a little like this: You have found a property you need to invest in, and you need a hefty sum of money to buy it. Your first task is to find those who are willing to put up money in order to get a foot in the door of real state investing with a short-term gain.

You will then have to find out the exact value of the property and work out the financing strategy. Will you, for example, want to hold onto this for the long term? If yes, then you will need to know how you will repay back the money you borrowed and over how long. Are you going to flip the property, make a profit and repay the investor? Again, you will need to work out just how much money you will have left after you have sold and where that will lead you.

The principal is the same whichever approach you take. Whether long-term or short-term you will need to work out the way the money will come in and how long you can hold onto it before you must pay it back. Within that area lies your profit both in terms of how much will end up in your pocket and the kind of cash flow you will have.

Investing in real estate using other people’s money is hardly rocket science, but you do have to know what you are doing. In the process, you will have the opportunity to compose a tonne of money and get the financial freedom you deserve.

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