Multifamily Investing With No Money

Learn More At FortuneBuilders: https://www.fortunebuilders.com/finance-a-multifamily-property/

Follow FortuneBuilders on Social Media

Facebook: https://www.facebook.com/flipthishouse/
Instagram: https://www.instagram.com/fortunebuil...
LinkedIn: https://www.linkedin.com/company/fort...
Twitter: https://twitter.com/fortunebuilders

Attend Than Merrill’s Real Estate Class Near You

https://event.fortunebuilders.com/cla...

—

VIDEO TRANSCRIPTION:

If you want more cash flow, huge tax breaks and easier to manage properties, it’s time to consider investing in multifamily real estate. Multifamily properties are buildings or homes that contain two or more residences. While these properties typically come with higher upfront costs, they offer investors immense opportunity and the ability to diversify their portfolios. So how can you invest in a multifamily property if you’re lacking liquid capital? We’ll tell you! Keep watching for 7 financing strategies that can help anyone buy multifamily real estate with no money down! 

1) Private money: Private lenders use their own money to invest in your deal, which means investors can avoid working directly with traditional financial institutions. Terms will vary from lender to lender but will almost always have more lenient requirements compared to banks. So where can one find a private money lender? Start by inquiring with your existing social network like family, friends, colleagues, and other investors.

2) Equity shares: represent another viable multifamily financing option. With this strategy, investors offer to give away a portion of the equity from the property they intend to purchase in exchange for the cash to fund a down payment. Here’s how it works: let’s say an equity share investor gives you $100,000 towards your multifamily investment. In exchange, you might offer the investor a 40 percent equity share. This means, the equity share investor would ultimately receive both 40 percent of the monthly cash flow from the property, as well as 40 percent of the proceeds from the eventual sale of the property. This is a powerful strategy because it gives both investors a chance to generate short and long-term cash flow

3) Material sales can sometimes help investors generate enough money to fund the down payment of a multifamily property. On occasion, valuable materials that are discovered on a property — such as dirt, plants, gravel, timber, fertilizer, or any other resource that may prove valuable to another party— can be sold for cash. Material sales financing is most successful when investors look past the perceived value of the property and find hidden opportunities. 

4) Hard money: is another avenue investors can take to finance multifamily properties. Hard money lenders are either private individuals or small organizations that lend money to a borrower based on the value of a property, not the borrower’s credit score. If the loan-to-value ratio (or LTV) of a property meets a hard money lender’s standards, investors have a good chance of landing the deal. The interest rate and origination fees of a hard money loan are typically higher than a traditional mortgage loan, so investors should do their homework in advance to ensure they choose a multifamily property that will produce a successful source of cash flow. 

5) Repair Allowance: can also help to generate some cash for a multifamily property down payment. The strategy works like this: When an investor inspects a multifamily property, they’ll make a list of the repairs that need to be done before the purchase can take place. If the seller agrees to the repair allowance terms, that money will be given back to the investor at closing. Then, the investor can either complete the repairs themselves or with the help of a contractor. This helps save money that can be put towards the cost of a down payment. 

6) House hacking.:House hacking refers to renting out part of the property in which you currently live. Start by creating an online listing for your spare bedroom, loft, shared space or additional unit. Price your rental according to similar listings in the area and watch your cash flow increase as long or short-term tenants rent out your space. The money you make over time can be used to purchase your multifamily investment in the future.

7) Crowdfunding: Crowdfunding raises money by asking multiple investors for small amounts of capital rather than one big investment from a single investor. Those who choose to put money into your crowdfunding campaign will be paid back with interest or in terms of an equity share.  Remember, successful crowdfunding requires a reliable network and a strong pitch. So with the right negotiation skills, investors should be able to raise enough money to purchase a piece of multifamily real estate through crowdfunding.