How To Buy A Multifamily Property With No Money 2 easy ways

Summary

In this video, Juan Pablo shares strategies for entering the multi-family real estate market without leveraging personal credit. He discusses two main options: the master lease option, which allows control of a property without ownership, and limited partnerships, where one can partner with someone who has better credit or financials. These methods are particularly useful for those with negative credit or who prefer not to use debt, aiming for passive income through multi-family investments.

Takeaways

• 🏢 The video focuses on strategies for entering the multi-family real estate market without leveraging personal credit or using debt.
• 📈 The channel emphasizes three pillars to financial freedom: personal finance, credit, and multi-unit investments for passive income.
• 🚫 If you have negative items on your credit, it's crucial to address them before pursuing multi-family investments.
• 📝 The speaker shares personal experiences, such as using a master lease option to control a property without owning it, which can be a strategy for those with limited cash or credit.
• 💼 The master lease option allows the leaser to sublet units and improve property performance, generating cash flow without the need for a mortgage.
• 🤝 The video suggests considering partnerships as a way to invest in multi-family properties, especially when personal credit or financial documents are not up to par.
• 💡 Limited partnerships can be a creative financing strategy where partners with better financials or credit take the lead, allowing others to invest with less scrutiny on their own financials.
• 💼 The importance of having a small equity percentage in a partnership is highlighted to avoid mortgage lenders requesting personal financials.
• 💰 The video encourages viewers to be creative with financing, such as master lease options or limited partnerships, to overcome barriers to multi-family investment.
• 🎯 For those looking to say goodbye to a 9-to-5 job, the video offers a free training resource on leveraging a portfolio for passive income through multi-family investments.

Q & A

What are the three pillars to financial freedom mentioned in the video?

The three pillars to financial freedom mentioned are personal finance, credit, and multi-units and multi-family investments.

Why is it important to subscribe to the channel according to the video?

Subscribing to the channel is important to receive additional videos that can help viewers along their journey towards financial freedom, as the algorithm will recommend more relevant content.

What is a master lease option and how does it relate to multi-family investments?

A master lease option is a strategy where an individual takes control over a property by leasing it with the right to sublet, without actually owning it. This allows the individual to generate cash flow from the property's operations without the need for bank financing or leveraging personal credit.

How does the speaker in the video use the master lease option to acquire a 13-unit property?

The speaker used the master lease option by negotiating with a motivated seller to take control of the 13-unit property. He then increased rents, filled vacant units, and made repairs to improve the property's cash flow, all while the seller retained ownership and tax benefits.

What is the benefit of a master lease option for someone with low credit or cash?

The benefit of a master lease option for someone with low credit or cash is that it allows them to control a property and generate cash flow without needing to go through a bank for financing or having to provide a significant down payment.

What is a limited partnership and how can it be used in multi-family real estate?

A limited partnership is a business structure where partners contribute capital or credit to an investment, with limited liability for the actions of the partnership. In multi-family real estate, it can be used to pool resources, with some partners providing the necessary credit or capital while others contribute expertise or other assets.

Why did the speaker's tax returns with losses hinder his ability to get a mortgage?

The speaker's tax returns with losses indicated to potential lenders that his business was unprofitable, which made him a higher risk for defaulting on a loan. Lenders typically prefer to see a history of profitability and stable income when considering mortgage applications.

How did the speaker overcome the issue of not qualifying for a mortgage due to his tax returns?

The speaker overcame the issue by entering into limited partnerships with other investors who had better financial documentation and credit. This allowed him to participate in multi-family real estate investments without having to rely solely on his own financials for mortgage qualification.

What advice does the speaker give for those who are lacking in credit or documentation for multi-family investments?

The speaker advises those lacking in credit or documentation to be creative and consider strategies like master lease options or forming limited partnerships with others who can bring the necessary credit or capital to the table.

What is the significance of the speaker's statement about controlling being better than ownership?

The speaker's statement emphasizes the idea that having control over a property and its operations can be more valuable than owning it, especially in terms of managing risk and leveraging opportunities for cash flow without the responsibilities of ownership.

What additional resources does the speaker offer at the end of the video?

The speaker offers a free training for viewers to learn more about leveraging their portfolio for passive income through multi-family investments, encouraging them to click on a provided link for more information.