Buy Rental Property With No Money and No Problems!
Sounds too good to be true?
If you’re like most people, you know that something’s missing. You’re working hard, sleeping less, and stressing more about the future than maybe ever before. While the economy is hard to predict, one thing’s certain: it’s seen better days.
But hope is here. In fact, you can start building lasting wealth and predictable income today. As a successful luxury short-term rental (STR) investor, I know what it’s like to create the lifestyle of my dreams. And I want to share my knowledge, tips, tools, and strategies with as many women, mothers, and entrepreneurs as I can.
My Short-Term Rental Academy does just that!
If you’re looking for your ramp off the ‘rat race,’ it starts with investing in short-term rental properties. And you don’t have to be rich (or even close) to do it.
Are you wondering how you could possibly purchase short-term rentals with no money? Well, let’s be real: it sure helps when you have a little something to begin with. But with that being said, there are so many ways to get started on a teensy, tiny budget. Ready to get off the fast track to Burnout City?
It’s easier than you think. Here are eight ways to do it!
(1) Ask a Friend or Family Member For Help – It Can’t Hurt!
As they say, it never hurts to ask. If you have a friend or family member you trust that you know has money, consider asking for a loan. According to the National Association of Realtors, about 10% of home buyers received a loan from a family member or friend in 2020. Of course, that was before Covid changed the world. Still, it’s worth the effort to approach a loved one or bestie.
How to Manage This
When you come to your family or friends, have a solid plan in place. Show them the numbers, the potential for returns, and how this investment will benefit everyone involved. Offering equity in your short-term STR property is a great way to entice family and friends to invest.
You may even set up a Limited Liability Company (LLC) to pool your family or friend’s funds and create a legal entity to own the property. Ensure to negotiate terms that are favorable to all parties.
Finally, offer a guaranteed return on investment or a payment plan. If you cannot pay back your family or friend in one lump sum, you can pay them back over time, making it easier to manage your finances.
(2) Acquire Seller Financing
Sometimes, the property seller is willing to finance the purchase themselves. This means you can buy STR property without money down and pay the seller directly over time. There are a few reasons why a seller might offer financing. For one, it can be a way to sell a property quickly. If the seller has trouble finding a buyer, offering financing can make the property more attractive to potential buyers. Additionally, the seller can earn interest on the loan, which can be a good source of passive income.
Is Seller Financing Really A Good Idea?
You may be thinking, "Why would I want to do this?" Well, there are several benefits to seller financing.
Seller financing means you don't have to go through the traditional loan application process, which can be time-consuming and stressful. If you have less-than-perfect credit or don't meet the strict income requirements of a traditional loan, you can buy rental property with no money using seller financing.
Just be sure to negotiate the interest rate with the seller, as it will likely be higher than what you would get from a traditional lender. Also, the seller may require a larger down payment than you would have to put down otherwise.
Do your research, negotiate the loan terms, and consider the risks involved.
Are you still worried you may have trouble paying back the seller in a responsible manner? No worries! Learn the top 75 cities for short-term rental investing from my Signature Freebie.
You will be making a great passive income in no time!
(3) Try Some House Hacking
Are you willing to live in the property you rent out? If so, you can save money on rent and use that to pay for the mortgage. This is called house hacking, and no, you don’t need to be a computer whiz! House hacking is where you essentially become both the landlord and the tenant. You can do this with a single-family home, duplex, triplex, or even a multi-unit apartment building. Luxury homes work best, of course, because they’re spacious and comfortable! You could even use a guest house.
By renting out part of your property, you can generate extra income to help pay for your mortgage and other expenses.
Living in part of the property means you save money on rent or mortgage payments. Look for a property with a separate living space or the potential to create one. Additional rooms could be a basement, attic, or a separate unit.
Easier Property Management
Since you're on-site, you can keep a closer eye on your rental unit and respond quickly to any issues.
Just make sure you pick your tenants carefully. Do your due diligence and scope out their backgrounds, finances, and rental history. The last thing you need is to be living with an unruly person!
(4) Smartly Use Your 401(k)
Have you considered tapping into your 401k? Don't worry, it's not as scary as it sounds. If you have a 401(k), you can borrow up to $50,000 or 50% of the account balance (whichever is less) to buy STR property. Just make sure you pay back the loan on time to avoid penalties.
But first, your employer has to allow you to take out a loan from your 401k to use towards your short-term rental investment. You will have to repay the loan with interest, but the interest rates are typically lower than other types of loans.
You can also roll your 401k into a self-directed individual retirement account (IRA). Doing this gives you more control over your investments to use your funds to invest in short-term rental properties.
When you need to buy rental property with no money, the self-directed IRA is king (and queen)! Because the money comes from your own retirement account, there's no need for a credit check. No worries, no hassles.
401k loans typically have lower overall fees than other types of loans, saving you money in the long run.
If you take out a loan from your 401k or roll it over into a self-directed IRA, you won't be subject to the early withdrawal penalty.
(5) Hard Money Loans
Hard money loans are short-term loans typically used by real estate investors to finance a property purchase. Hard money lenders are often more flexible than traditional lenders with loan terms, allowing investors to negotiate terms that work best for them.
Hard money lenders also typically focus less on a borrower's credit score and more on the property's value as collateral, which is great for a luxury rental!
Just remember: hard money loans often come with higher interest rates than traditional loans and usually have shorter repayment terms too, which means you may need to make larger monthly payments.
(6) Lease Option
Lease options are agreements between a property owner and a potential buyer, where the buyer may purchase the property at a predetermined price and within a set time frame. During this time, the buyer is given the option to rent the property and collect rental income, just like a landlord.
Lease options are perfect for short-term STR property investments because they allow you to make money off the property without actually owning it. With a lease option, you can rent out the property and generate income while you work towards owning it.
The advantages of lease options include:
- Lower upfront costs
- Ability to generate rental income
- Option to purchase the property at a later date
- No need for a mortgage or bank loan
Let's say you find a property worth $200,000, and the owner is willing to enter into a lease option agreement with you. You agree on a purchase price of $210,000 within a two-year timeframe. You start renting out the property as a short-term rental and generate $2,500 in monthly rental income. After two years, you have generated $60,000 in rental income to be used towards the purchase price. You now need to come up with $150,000 to complete the purchase, which can be done by securing financing or using additional savings.
(7) Buy a Property with Existing Tenants
If you buy STR property with existing tenants, you can start earning rental income right away. Just make sure to review their rental agreements and be prepared for the possibility of renegotiating or replacing them.
Schedule a meeting with the tenants to introduce yourself, answer any questions they may have, and build a relationship. While you may have some ideas for improving the property, don't rush into making any immediate changes. Give the tenants time to adjust to you as the new landlord, and wait until their lease is up before making any significant changes.
If you have reliable and responsible tenants, consider offering them incentives to stay. A lease renewal incentive, such as a discounted rent or an improvement to their living space, can help you keep good tenants and save you the cost of finding new renters.
It’s a win-win!
(8) Use a Home Equity Line of Credit (HELOC)
Do you want to buy rental property with no money but feel like you’re out of options? A HELOC is a loan that allows you to borrow against the equity in your home. Essentially, it's like a credit card that uses your home as collateral. Using a HELOC to invest in STR property can be an excellent financing option because it typically has lower interest rates than other types of loans. Additionally, because a HELOC uses your home as collateral, it's easier to get approved for than other types of loans.
You'll need a good credit score, and your home will need to have enough equity to borrow against. Once approved, you can begin to access the funds. After purchasing the short-term STR property, you must pay back the HELOC.
With lower interest rates and easier approval, a HELOC loan is a great option for those with little money to invest. Just ensure you do your due diligence and factor the monthly payments into your cash flow projections.
Ready to Finance Your Next Short-Term Gem?
A future of financial and lifestyle freedom is not far away! I have learned firsthand how short-term rental investments can change your life. You have the potential to generate up to 10x as much revenue as you would with a long-term rental!
Still unsure about how to purchase and market that first luxury property? You have nothing to worry about. Many hard-working, would-be investors have learned the ropes with my programs. Take, for instance, Karima, who in only four days, booked her first corporate rental at $9K/month!
Karima’s story is just one of many. With my premier programs and cutting-edge tools, prospective investors are crafting the lives of their dreams. They’re quitting the moonlight shift, cutting their 9-5 hours, and realizing a pathway to success outside the normal grind.
As the demand for short-term rentals explodes, don’t you want to be leading the trend? If you’re a medical professional worn out by long shifts and suffocating under loans, you have options!
Check out my comprehensive services, which will show you how to start a massively profitable - and passive - luxury rental business with little money and experience!
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Dare to discover the life that awaits beyond the Luxury Short Term Rental Academy doors.Let's Get Started