When you think about buying a rental property, you probably think about going through the traditional underwriting process at a big-name bank. Traditional mortgages can be a helpful tool for growing your real estate portfolio… but there are also a lot of scenarios in which a mortgage isn’t the right fit.
So if you find yourself in a situation where you’re trying to grow your portfolio without a traditional mortgage, this episode is for you! On this episode of Investing in Real Estate, I’m going to share five alternative ways to buy a rental property.
More About This Show
- Using retirement funds. I’ve been talking about the merits of buying real estate investments with a retirement account for years.. but it still shocks me how many people don’t realize this is an option that is at their disposal! There are a few ways to go about it, and it just depends on what type of account you have access to and what your employment status is. Two of the most common routes we see investors take are: 1) a 401k loan and 2) buying real estate inside a self-directed IRA. Using retirement funds to invest can be a good fit for investors who want to diversify their retirement funds and have more control over their investments.
- Tapping into home equity. This is another way to invest that many investors overlook. In recent years, home values have risen significantly, leaving homeowners with tons of capital available. Options for accessing your home equity include utilizing a cash out refinance or taking out a home equity line of credit. If you’re a homeowner who is interested in this strategy, I want you to check out my full video called “The Ultimate Guide to Leveraging Your Home Equity to Invest.”
- Harnessing the power of non-recourse financing. A non-recourse loan is a business loan that is based on the asset’s qualification. This can be a great solution for investors who have maxed out the 10-mortgage limit, have a lower credit score, or don’t want to sign a personal guarantee. The drawbacks are that the loan terms will be less favorable, meaning you’ll need a bigger down payment and will pay a higher interest rate. But all-in-all, a non-recourse loan can be an excellent product for growing your portfolio without using a traditional mortgage.
- Getting into the world of private lending. If you need flexible loan terms, there’s no better place to look than private money. Working with a private lender is a great way to buy rental properties without using a mortgage, because there are no government standards or regulations. When you work with a private lender, you’re able to negotiate terms that benefit both parties.
- Teaming up with a partner. Buying real estate within a real estate partnership can be a great way to double or triple your resources. This can work in so many different ways—whether you both have funds, or maybe you have the knowledge and willingness, but need a partner that has money. You’ll need to consider splitting profits and the legal implications of working with a partner, but as long as you work the deal correctly, a partnership can be beneficial for both you and your partner.
Episode Resources
Book a Call with Our Team
morrisinvest.com/bootcamp ← Download your FREE 90-Day Bootcamp!
Subscribe to Investing in Real Estate on Apple Podcasts
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel
Like Morris Invest on Facebook
DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
AFFILIATE DISCLOSURE: Some of the links on this channel are affiliate links, meaning, at NO additional cost to you, I may earn a commission if you click through and make a purchase and/or subscribe. However, this does not impact my opinion. We recommend them because they are helpful and useful, not because of the small commissions we make if you decide to use their services. Please do not spend any money on these products unless you feel you need them or that they will help you achieve your goals.
Ready To Build Passive Income Through Rental Real Estate?
Ready to talk about your goals? We're here to show you the tools and teach you the process to begin earning legacy wealth for you and your family.
