Forget the “creative” ways of financing rental properties — here’s a reality check.
There are several books and websites that suggest “creative” financing methods for real estate investors and claim that you can buy rental properties with little or no money down. These could include trying to obtain seller financing for some or all of the purchase price, borrowing against the equity in your primary residence, and even using a credit card or a personal loan to come up with the down payment.
While these options are certainly possible, they can be difficult (if not impossible) to implement in real-world situations. And even if you can, it’s often financially irresponsible to over-leverage your real estate investments.
So, let’s take a look at how much you really need to buy an investment property in real-world situations and in a responsible manner, as well as some less capital-intensive alternatives you could choose to pursue instead.
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