Real estate myths in Riverside: You cannot buy with no money down, by Ruby Frazier.

Real Estate Myths In Riverside:

You Cannot Buy With No Money Down

By Ruby Frazier

According to the latest figures from Zillow, the typical home value for homes in Riverside is $608,078 with some companies pegging this figure to a high of $618K. Approximately, home prices in Riverside have risen 22.5% compared to last year with an average of 26 days on the market. Looking at the above, it is clear that we are in a seller’s market, and many buyers wanting to get into this market are oftentimes misguided.

Many believe that they cannot buy without a downpayment. But, I want to dive into that misguided concept about our market. Regardless of what you see on TV shows like Fixer Upper: reality often presents a different story.

Riverside has always presented itself as a county for the average citizen and therefore, buying a home here makes so much sense for a firsttime buyer. While you may be assuming that homeownership in Riverside is out of your reach, you may want to rethink that, the reality is, you do not have to have a lot of money down if you want to get into the real estate market in Riverside.

On the other hand, is it still possible to get into this market as an investor… still with little to no money down?

The good news is, it is possible!

Real estate investing simply refers to all operations that go on in the business with the intention of making a profit in the long run, including the purchase and management of properties for future sales or rentals. This definition cuts across all categories of the diverse real estate market including; residential properties to commercial, special-use, and land properties. Two well-known characteristics of real estate that investors take into consideration are that:

l It has relatively limited liquidity. l It is capital intensive.

For that reason, beginners and persons unfamiliar with the terrain presume that one needs massive funds down before one can invest in the industry. However, moguls would tell you otherwise: that such isn’t impossible. All you need is the know-how, and that is what you would be learning here.

It is important to understand that if you are going into this market as an investor that is totally different from buying as your primary residence.

Ways to Invest in Real Estate with Little or No Money Down

l FORM A PARTNERSHIP

If you have limited funds to invest in real estate and are new to the business, forming a partnership might be your best bet. It involves partnering with other real estate investors who would provide a large portion of the financing to purchase a property.

Note that to succeed at attracting partners, you must be willing to undertake to do most of the work: doing proper market research in finding properties with attractive ROI, purchasing, and management. On the flip side, these investors are usually more seasoned and experienced, so it is a win-win relationship.

l HOUSE HACKING

House hacking is a top real estate investment strategy anyone can take advantage of and is a great idea when you do not have much money to invest. And what’s more, you can legally house-hack a property you reside in - which is mortgaged. If the property has multiple units, you can have one as your primary home and rent out the others. If it’s a single-family home, you can still rent out a bedroom or basement. The income you collect from the rents can then pay for your mortgage and perhaps renovations on the home, thereby increasing its market value.

Nothing comes close to house hacking when it involves killing two birds with one stone: clearing your mortgage debts and starting real estate investing from scratch. If you have a low credit score, or you want to avoid financial institutions and debts as a whole, you should consider private equity or crowdfunding. In private equity, you can reach out to venture capitalists if you have mapped out a brilliant business model for real estate investment and are willing to kick off a startup company to that effect. These investors would consequently own an agreed portion of the shares and the profits they generate.

In crowdfunding, you can reach out to as many people as possible through publicity strategies that would be willing to invest a specified amount - usually a little bit of money - with a given ROI.

If you are going to undertake this path, know that it takes a lot of grit and dedication. Nonetheless, many successful real estate investors started this way as well.

l REAL ESTATE WHOLESALING

Can you invest in real estate without even purchasing an investment property?

The answer is Yes! - through real estate wholesaling. All this strategy requires is for one to be highly opportunistic: you find a property that is being sold under market value, put it in a contract, and find a buyer willing to sign up for it. Then you earn your cut for quickening the process.

To be successful with this method, it is vital that you have eyes and ears everywhere: a broad real estate network and easy access to info on cheap-selling avenues like bank sales and foreclosed properties.l PRIVATE EQUITY / CROWD FUNDING

If you want to get into the Riverside market as a homeowner, the following program will be extremely helpful;

GOLDEN STATE FINANCE AUTHORITY (GSFA)?

GSFA is a public agency/entity providing affordable housing programs. As a public entity in California, GSFA has distinguished itself as a leader in affordable housing finance, where it has helped over 80,000 individuals and families purchase a home over the last two decades. Moreover, the entity has provided more than $859 million in down payment assistance and has participated in the financing of over $13.7 million in first and second mortgages, according to Carolyn.

GSFA has two affordable housing programs; the GSFA Platinum Program and the GSFA Open Doors Program, which are accompanied by down payment assistance up to 7% of the mortgage loan amount.

WHAT MAKES GSFA UNIQUE.

You might be wondering why I’m highly recommending GSFA programs to you. Well, there are many legit reasons, but the most important to note is their flexibility and accessibility. In most other programs, you do not qualify if you aren’t a first-time homebuyer. But at GSFA, you do not have to be a first-time homebuyer to qualify for a DPA.

“You don’t have to be a first-time homebuyer to qualify,” Carolyn Sunseri, Marketing Director of the Golden State Finance Authority (GSFA). “So, it could be someone returning to the housing market that owned a home in the past and wants to purchase a primary residence, or it could be somebody who’s first-timer buying a home, or maybe even leaving a home today and want to buy a home they’re going to be moving into as their primary residence.”

Additionally, GSFA allows the FICO score, which goes as low as 620, further demonstrating its flexibility and another reason why I highly recommend it. “I think this is very flexible and allows a lot of people who may have perfect credit to be able to qualify with a mortgage loan with mortgage fund assistance,” Carolyn adds.

Interestingly, GSFA also provides DPA on a fourunit property. This is a unique feature since there is no other program out there that offers this.