But how could I start investing in real estate if I had no money? The answer is a non-profit charitable organization called NACA, that offers loans with no down payment and no closing costs. The magic is that they loan money on “income producing properties”. I would have to live in the property, and I couldn’t own any other real estate. But could rent out other parts of the property, and that’s the key to starting from nothing. This would be possible totally outside of my income from my rat race day job.
I would consider one of these four scenarios involving income producing properties:
- Room mate scenario
- In-law suite scenario
- Duplex scenario
- Quadruplex scenario
I’m certain that NACA offers loans for duplexes and qaudruplexes (four-plexes). They would give me “credit” for the rent I charge the families living on the other side of the duplex, or in the other three units of the quadruplex, and in this way my rat race day job easily qualifies me for the loan on such a larger property. The rent I would collect generally pays for the mortgage, so that I could save the money I would have otherwise paid for rent. Then, this saved money is what I use to start buying multiple single-family rental homes.
NACA will also offer loans on single-family houses, of course. I’m just uncertain as to whether or not they’d give me the rent credit for room mates or the in-law suite. And about the in-law suite scenario, it would be me living in the in-law suite and a tenant renting the majority of the house. I would definitely try to convince them, because the in-law suite scenario is probably the best of them all.
Continue reading for details about these four scenarios…
