Property development is expensive and requires significant capital. However, it is possible to enter the industry without having to empty your bank account.
Aggressive saving is one route to explore. This involves tracking your spending and putting aside a large proportion of your income. This can be accomplished by cutting down on luxuries.
1. Find a Partner
The first step in getting into property development without money is finding a partner. This can be someone who shares the same ambitions, but also brings a different set of skills to the table.
You can find partners by networking at events and asking around. It is worth remembering that many people talk the talk but don’t always walk the walk, so make sure to do your research and ask to see their portfolios.
It’s a good idea to start small and focus on one or two property strategies, for example multi lets (HMOs), commercial conversions or land developments. Once you get some experience under your belt, you can branch out and try more complex deals.
Remember that your investors come first – you need to be ethical and put their interest before your own. If you can do this, then success will follow.
2. Do Your Research
You don’t need a degree to do proper research into property markets, and it can help you avoid a lot of the mistakes that newcomers to the business make. You should also do your homework on people who say they can help you – find out what their track record is like, look at portfolios and ask for references.
One proven method of entering the property business without money is seller financing, which is where sellers extend finance to buyers for the purchase of properties. This can work well if you find properties that are being sold below their true market value.
Another method is rental property investing, which involves buying and holding properties in the short term for a small profit. This can be more complex than just flipping properties but it can offer good long term returns if done correctly. If you are looking to get into this then be sure to take into account local factors like the quality of schools and the proximity of transport links.
3. Make a Plan
Once you’ve found a property development partner and done your research it’s time to start planning the way forward. Having a business plan is an essential part of property development as most investors won’t even look at you if you don’t have one!
This will cover everything from your company description to financials. It’s also a great opportunity to demonstrate your understanding of the market. So be sure to include information such as rental prices, vacancy rates and new developments in the area.
You should also consider the type of property development you want to get into – this could be land developments (which are more complex but can offer huge long term returns) or short term hold strategies such as house hacking (buying properties, improving them and then selling them on). Whichever route you decide to take, it’s important to focus your efforts and be realistic with your goals. This will ensure you don’t burn out or give up along the way!
4. Start Small
The key is to start small and focus on one particular type of property strategy. This will help you avoid wasting time and effort, especially in the early days. It’s also important to have a clear idea of how much time you can devote to your new business each week. If you don’t, you risk spreading yourself too thin and ending up exhausted and wondering what happened.
One of the best ways to get into the property business without any money is through seller financing. This involves the sellers of properties providing finance to buyers, enabling them to buy the property at an agreed price.
Another option is to look for opportunities in up and coming areas, where prices tend to rise rapidly. Alternatively, you can try a bargain do-up, buying cheap properties that can be fixed up for a quick profit. This will involve a lot of hard work, but it can be extremely lucrative.