Creative acquisition strategies for real estate investing

Creative acquisition strategies for real estate investing

Creative acquisition strategies for real estate investing

Most investors looking to acquire property don’t go past the obvious cash offer and put it into contract. Many get stuck in situations where there is no equity in the home or maybe you can’t get a hard cash loan for some reason.

That’s why this topic is important. When you get into a home that may not have a lot of equity, but may still have cash flow, most investors will try to go for a short sale, and that may not be the best option.

What happens if the mortgage is current? I know you’re not going to get the seller to be late with payments, so you need a different strategy.

There are many creative ways to take control of a property.

Equity sharing where multiple investors own part of the property. This is most common in commercial real estate, but can also be used for residential real estate.

Donald Trump doesn’t take money out of his own pocket when he goes to buy a big building. Instead, he gathers investors and offers equity in the property.

Here’s how it goes…

In a typical loan situation, a buyer buys a property by borrowing money from a lender. As the value of the property increases, only the buyer benefits, not the lender. If you are looking to borrow a large amount of money, the lender may consider it too risky. In such a situation, you can offer the lender a position on the equity of the property and partner with them.

This is a more advanced strategy that obviously requires you to speak with your attorneys and other professional advisors.

When doing a joint venture or forming partnerships, it is important to decide at the outset what will happen if there is ownership. When everyone sells. How does one get out if they have to withdraw money sooner than they thought?

These are all questions you should have in your agreements.

So how will this work in residential real estate?

Well, you might have a deal but no money. You can find someone who has money but no time or no deal and offer them an equity stake in your deal and form a partnership.

This is one of the coolest strategies I’ve seen for creatively acquiring real estate without taking money out of your own pockets.

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