Published December 2014. Updated October 20, 2023.
Have you considered investing in real estate without putting up a down payment? You may think it's an absurd question, but we're here to let you know that it's definitely plausible. The key is being creative!
Today, our seasoned real estate experts have insights into investing in the Detroit real estate market, even if you don't have tremendous capital to get started. With the right strategies and support, you can build wealth by starting small and growing your real estate portfolio.
Find The Best Investment Deal Possible
When you realize that purchasing a home without putting down money is realistic, you'll need to be prepared to handle a little extra work.
For example, say two people are looking at purchasing a home.
One chooses the option to purchase the home for $120,000 with $50,000 down.
The second fellow manages to get a better deal and purchase the home for $90,000 with nothing down.
Who has the chance of a better ROI (return on investment)? The second investor is the smarter investor.
When you don't tie your money into a rental property, your chances for a higher return are greater. The moral of the story is to do your best to find the best deal possible on any home you're purchasing without a down payment.
It takes a little work to find them, but they are out there! One of our Detroit real estate investment experts can help.
Become an Ultra-Conservative Investor
Those who have made the habit of purchasing properties with little to nothing down are prepared for the worst. They avoid significant, unnecessary expenditures and have plans in place if things go wrong.
They've also carefully considered their future plans for the property and analyzed every scenario that came to mind. Taxes, vacancies, repairs, and unruly tenants should all be on your 'what if' lists.
Plan ahead and take these costs into consideration before jumping into a purchase without money down. If you don't have the cash for a downpayment, chances are you don't have the cash to cover the costs of a significant maintenance emergency or upgrade to attract good tenants.
Budgeting becomes crucial, as well. Being an "ultra-conservative" investor requires mapping out every penny and then sticking to that plan without sacrificing the quality of the property or services for your tenants.
Be Prepared To Sacrifice
In exchange for the money that you're saving, there is a trade-off: your time.
When you venture into real estate investing without cash in your pocket, the amount of time you'll spend finding interesting and clever ways to make a deal will rapidly build up. You'll also spend significant time managing the property and tenants if you don't have the cash for a professional property manager yet.
Make sure you're mentally prepared to handle the logical hoops, along with getting the best deals possible. Don't hesitate to ask for help, especially from the most creative minds you know.
Our Own It Detroit investors are experts at helping investors find the best deals, reduce expenses, and maximize revenue.
Don't Forget The Financial Cushion
Just because you're not purchasing a property with money down doesn't mean you shouldn't have money in the bank. Problems occur, bad things happen, and accidents are inevitable.
Make sure you are financially prepared for any disasters that come through your real estate door. Start by saving a portion of your monthly rental income to build up your cash reserves. Then, when it's time to handle an emergency or your property needs a routine repair, get estimates from trustworthy contractors for the best prices without sacrificing quality for the fix.
Is Detroit a Good Place to Invest In Real Estate?
However, you'll need a plan to find excellent deals, manage properties and tenants, and optimize revenue. Working with an experienced real estate investment team in the market is the best way to start and grow your real estate success in Detroit.
Turnkey Investments Are the Best Way to Invest
One of the best ways to start in this market is with a turnkey rental property. These investments have already gone through upgrades and renovations to become "rent-ready." In most cases, these rental homes already have paying tenants delivering monthly rental payments.
With one of these properties, real estate investors don't have to worry about buying a home that needs repairs or the costs associated with updates or renovations to attract quality tenants. It's already been done for you.
Additionally, turnkey solutions with Own It Detroit ensure you have the best tenants in your properties and ongoing professional property management. You'll never have to handle tenant calls, bid out work for repairs or maintenance, or deal with leases. Our property management experts handle everything for you while ensuring your rental properties deliver the best ROI.
Invest in the Detroit Real Estate Market to Build Wealth
You don't have to have a lot of cash to invest in the Detroit real estate market! Investing without placing a down payment is done properly and successfully by some of the most creative investors around.
Rack your brain and get the wheels turning before you jump into this tricky territory. Be sure to partner with the most experienced real estate specialists in the market, like our Own It Detroit team. If you're ready to learn more about our turnkey opportunities or how to find your first property in Detroit, reach out to our team!