K.A. asks from Blue Bell, PA on August 05, 2011
Investing in Real Estate
Does anyone have any advice/knowledge on how to go about buying a few investment properties with no money down? My husband and I are interested in getting into Real Estate and need a little help. We've heard of people buying property with little or no money down and wondered how they did it. Any information/advice would be helpful. Thanks in advance.
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C.S. answers from Miami on August 05, 2011
As a financial advisor, if you can't buy an investment property cash, you have no business buying it. I would advise you to see a professional financial advisor to look at your whole financial picture and work with you towards suitable investments that meet your financial goals. Those who tell you that real estate is a safe investment don't live in any of the locations across the US where real estate has recently dropped drastically. I'm in FL and most of the houses in our area aren't worth 1/2 of what they were worth in 2006.
Let me know if you have questions. I would be happy to answer some via email complimentary.
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K.K. answers from Austin on August 05, 2011
It is extremely difficult these days to buy investment properties with no money down. You really need at least 20%. Also, you should not take a mortgage out on investment property. Save up and pay cash. If you don't you will get into trouble one of these days. If you can't buy it with cash then you can not afford it. You also need to be debt free yourself before you start buying other real estate.
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K.J. answers from Chicago on August 05, 2011
Are you sure you want to go in with no money down in a questionable real estate market? If the market drops at all you'd be upside down on your mortgage right away! I learned quite a bit about real estate the hard way (as I believe so many people did who got burnt by the downturn.) I'd never go in again with less than a 20% down payment, and I'd be very suspicious of any organization that lets you do it with less.
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K.P. answers from New York on August 05, 2011
My understanding is that you must have a hefty down payment now to qualify for a second mortgage. If you have cash to buy a property out-right, do it. If not, don't.
K.F. answers from New York on August 05, 2011
There are many ways to buy a house with no money down but you would need to be real estate or money savvy to do so. With the financial institutions now again having a tight reign on lending, you will need to know in advance how much house you could afford. Where are you looking to buy? Do you plan on renovating and selling a distressed property? Can you get the work done? What's your budget? Can you find a seller willing to finance your purchase of the home? Do you plan on renting out the home? What are rents going for in the area of the property you are interested in? What kind of property are you interested in purchasing for investment purposes?
You really need to learn more about the real estate business before deciding you want to invest in real estate but I hoped this will help you on your journey.