Brandon Turner's Real Estate: 7 Low-Money Tips

Are you interested in real estate investing but think you need a lot of money to get started? Have you ever wondered if there are ways to invest in property with little to no cash upfront?

Brandon Turner's real estate expertise offers creative solutions for aspiring investors. In his book The Book on Investing in Real Estate with No (and Low) Money Down, Turner shares strategies for acquiring properties with minimal initial investment. You'll discover various methods to enter the real estate market, even if you're short on funds.

Keep reading to learn Brandon Turner's top tips for success in real estate investing and how you can start building your property portfolio today.

Creative Financing Strategies for Real Estate Investing

If you're looking to get into real estate investing but don't have a lot of cash on hand, Brandon Turner's real estate expertise offers some creative solutions. In his book The Book on Investing in Real Estate with No (and Low) Money Down, Turner outlines several strategies for acquiring properties with minimal upfront investment.

House Hacking: Live in One Unit, Rent Out the Rest

One of Turner's top tips is a strategy called "house hacking." This involves purchasing a multi-unit property, living in one unit yourself, and renting out the others. The rental income from the other units can often cover most or all of your mortgage and expenses, potentially even generating extra cash flow.

For example, you could buy a triplex using an FHA loan with just 3.5% down. You'd live in one unit and rent out the other two, allowing you to start building your real estate portfolio with very little money out of pocket.

Leverage Government-backed Loan Programs

Turner highlights several government-backed loan programs that can help you acquire property with little money down:

• FHA loans: Require just 3.5% down and are great for first-time homebuyers or investors planning to live in the property.
• 203(k) loans: Cover both the purchase price and renovation costs, allowing you to buy fixer-uppers that other buyers might overlook.
• VA loans: Offer no down payment and no PMI for eligible veterans.
• USDA loans: Provide 100% financing for rural properties to low and moderate-income buyers.

These programs can significantly lower the barrier to entry for new real estate investors.

Partner Up to Pool Resources

If you're short on cash, Turner suggests finding a partner to team up with. In an equity partnership, one person might provide the capital while the other contributes expertise, labor, or deal-finding abilities. You'd then split the profits based on your agreement.

While partnerships can be a great way to get started, Turner cautions that they can also complicate decision-making and potentially strain personal relationships. Make sure you have a clear agreement in place before entering into any partnership.

Tap Into Home Equity

If you already own a home, you might be able to leverage the equity you've built up to finance new investments. Turner provides examples of investors who've used home equity loans or lines of credit to fund their real estate ventures.

However, he also warns of the risks involved in this strategy. You could potentially lose your home if you can't keep up with the payments, so it's crucial to run the numbers carefully and have contingency plans in place.

Explore Private Money and Hard Money Lenders

When traditional financing isn't an option, Turner suggests turning to private money lenders or hard money lenders. These sources often offer more flexible terms and faster approval processes than banks, though usually at higher interest rates.

Private money might come from friends, family, or other individuals looking to invest in real estate indirectly. Hard money lenders are typically specialized companies that focus on short-term, high-interest loans for real estate investors.

While these options can be more expensive, they can help you close deals quickly or finance projects that traditional lenders won't touch.

Consider Lease Options and Seller Financing

Turner also discusses creative strategies like lease options and seller financing. With a lease option, you essentially rent a property with the option to buy it later. This can give you control over a property without needing to qualify for a mortgage right away.

Seller financing, where the property owner acts as the bank, can be another way to acquire properties when traditional financing isn't available. Turner suggests looking for motivated sellers who might be open to this arrangement, such as those seeking steady monthly income or hands-off property management.

Try Your Hand at Wholesaling

For those starting with very little capital, Turner recommends wholesaling as a potential entry point into real estate investing. As a wholesaler, your job is to find great deals on properties and then assign the contract to another buyer for a fee.

This strategy requires developing skills in finding undervalued properties, accurately estimating repair costs and after-repair value, and building a network of cash buyers. While it doesn't require much upfront capital, it does demand time, effort, and market knowledge.

Combine Multiple Strategies

Perhaps Turner's most important tip is to be flexible and creative in your approach. Many successful real estate investors use a combination of strategies, adapting their methods to each unique deal.

You might use an FHA loan to house hack your first property, then leverage the equity from that to buy your next investment. Or you could partner with someone to wholesale a few deals, building up capital to invest on your own.

By understanding the various tools available and thinking creatively, you can find ways to start and grow your real estate portfolio, even if you're starting with little to no money down.