If you’ve been contemplating investing in single-family rental homes but on the other hand, find yourself short on cash, know for certain—you’re not alone. Thankfully, there are numerous avenues to delve into real estate investment, even with limited funds.
With resourcefulness and strategic planning, you can make your dream of owning rental properties a reality. Below, we check out four alternative funding ideas to kickstart your real estate journey:
1. Purchase a Primary Residence
Amazingly, one of the most efficient ways to initiate your real estate investment journey is by first having a primary residence. Unlike loans for investment properties, certain programs exist tailored to assist first-time or other homebuyers in acquiring a home.
With lower down payment requirements and more appropriate interest rates for owner-occupied properties, procuring a home for yourself basically can pave the way for possible future investment endeavors.
Numerous profitable rental property owners actually got started by purchasing a primary residence, dwelling in it for a duration of time, and afterward converting it into a rental property—a tactical approach to enter the realm of real estate investment.
2. Invest in a Duplex
Investing in a duplex is another possible option the same as purchasing a primary residence. The concept includes living in one unit, qualifying for the valuable programs proposed to owner-occupied properties while renting out the other.
While sharing your living space with a tenant may seem scary, the potential upside is considerably significant—collecting rent that could cover a good portion of your mortgage payment. This arrangement reduces your living expenses and allows you to accumulate savings for prospective investment endeavors.
3. Utilize a Home Equity Line of Credit (HELOC)
Another attainable option for those unwilling to move or share living spaces with tenants is opening a home equity line of credit (HELOC) on your residential property. If your property values have appreciated through the years, your home might have sufficient equity to leverage for acquiring an investment property.
While most lenders habitually extend credit up to 80% of your home’s value, it’s important to check property values attentively and embark on the application process when a substantial amount of equity has accrued.
4. Negotiate Closing Costs
If you hold adequate cash for a down payment but need that for other expenses, look into negotiating with the seller or your lender to cover all your closing costs. Certain lenders give rebates or incentive programs to reduce the cash burden during closing. Equally, highly motivated sellers may be willing to assume closing costs to expedite the sale process.
With perseverance and strategic planning, you can achieve your aspirations of owning a portfolio of single-family rental homes. At Real Property Management North Puget Sound, our team of professional property managers stands ready to support you every step of the way.
Whether you’re a rookie or an experienced investor, we offer a broad range of services in Everett and nearby, including property assessment, discovering off-market deals, and expert guidance on rental rates and marketing strategies. Contact us online or call 425-527-6562 today to successfully start your real estate investment journey!
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