How To Buy Investment Property Without 20 Down -

Finally, partnerships offer a simple solution for those who have the expertise but lack the cash. Real estate is a collaborative industry where "money" and "hustle" often trade places. An investor can find a partner who has the capital but lacks the time or knowledge to find deals. In this scenario, the silent partner provides the 20% down payment, while the active partner manages the acquisition and renovation, with both sharing in the profits and equity.

For those who do not wish to move, the "BRRRR" method (Buy, Rehab, Rent, Refinance, Repeat) offers a path to zero-down investing over the long term. This strategy involves purchasing a distressed property with short-term financing, such as a hard money loan or a private loan from an individual investor. These lenders often focus more on the property’s potential value than the borrower's down payment. Once the property is renovated and rented, the investor refinances into a traditional long-term mortgage based on the new, higher appraisal. If the value has increased sufficiently, the new loan pays off the initial debt and returns the original capital, effectively leaving the investor with a cash-flowing asset and little to none of their own money left in the deal. how to buy investment property without 20 down

One of the most effective ways to bypass a large down payment is through owner-occupied financing. While "investment" usually implies a non-owner-occupied loan, programs like the Federal Housing Administration (FHA) loan allow buyers to purchase a multi-family property—up to four units—with as little as 3.5% down. The caveat is that the investor must live in one of the units for at least a year. This strategy, often called "house hacking," allows the investor to use rental income from the other units to pay the mortgage while gaining equity in a high-value asset for a fraction of the typical cost. Finally, partnerships offer a simple solution for those