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How to Invest in Commercial Real Estate with no Money Down
Many commercial real estate investors assume that the money will make or break their commercial real estate investment/deal.
A lack of available funds may stop a potential buyer from bidding on a commercial real estate.
It is, however, quite possible to purchase commercial real estate with little to no money coming directly out of the pockets of the purchaser.
Even though there are many real ways in which an investor may purchase a commercial real estate without even handing over the down payment at the settlement, it is very important to understand here all of the pros and the cons of each type of the agreement that can enable this and make it happens before the signing on the dotted line of a contract.
So, how can one invest in commercial real estate with no money down? Here are some examples of the no money down commercial real estate deals –
How to Invest in Commercial Real Estate with no Money? – Borrow the Money
One of the possibly easiest ways for one to purchase a commercial real estate with no money down is if they borrow the down payment for the commercial real estate in particular.
This can be done in a number of varying ways, including – either finding a lender that offers a low-interest rate, by using home equity, or by using some other line of credit loan, which will still come with the same tax benefits like the traditional mortgage.
One may also borrow from their commercial real estate broker – by arranging to borrow their commission for a short time and then use those funds for the down payment on the commercial real estate that they wish to purchase.
How Can One Invest in Commercial Real Estate with no Money Down? – Assume The Existing Mortgage
Some investors into commercial real estate are able to use a “subject to” contract which enables the buyer to use the existing financing of the seller for a part of the purchase price of the commercial real estate.
Employing this strategy is especially successful if the current loan is under a low-interest rate.
The investor then receives the title to the commercial real estate property in return for making the payments on the mortgage of the seller.
It is crucial for the investor here to conduct research on the existing loans, but it is also worth mentioning that, as some loans have a due on sale clause, they are prohibited from being assumed by another buyer.
Since April 2018 the value of the pound has been decreasing, and the currency was officially marked as one of the most unstable and unpredictable on the forex market.
Unless something major happens that changes the current circumstances, the pound is expected to continue to perform badly, and even potentially align itself with some of the weaker and more volatile currencies.
Conversely, it is precisely this uncertainty that makes the UK real estate investment property for sale market particularly beneficial for foreign investors.
As of now, it seems that there would be no transition period and that the UK will crash out of the EU, and revert to World Trade Organization rules on trade, which could see higher tariffs slapped on the exports.
The status of both UK citizens in the EU countries and the EU citizens in the UK would be uncertain at best.
If this happened, new trade deals would have to be brokered, but this process could take years.
Not to mention that the diplomatic relationships between the UK and the EU would be severely damaged.
UK Property Sectors Set to Stand Against the Uncertainty of Brexit
Disregarding everything else, the UK is still home to numerous prestigious universities, the 18 of which are featured in the top 100 of 2018’s QS World University Rankings, with the University of Oxford and the University of Cambridge occupying the 1st and the 2nd spot on the list.
With this in mind, it is of no surprise that studying in the UK is still rather appealing and that many international students keep applying.
According to UCAS, there was a rise of 2% in applications from students in the EU, and a rise of 6% in applications from students outside of the EU.
These students require places to sleep and call home while on their studies in the UK, creating a high demand for student real estate investment property for sale, accompanied by a 2.9% rental growth in 2017.
These factors combined make the UK an ideal environment for a profitable student real estate investment property for sale investment.
The rental home investment sector is another real estate investment property for sale investment sector in the UK that has remained isolated from the effects of Brexit, as the success of these investments relies on demographics rather than on politics.
The UK real estate investment property for sale market is now accessible more than ever, ironically thanks to the uncertainty around Brexit and the drop in the value of the pound against other currencies.
If you wish to know more, we recommend you speak with UK property experts, and they will provide you with data-based reports on the sectors that will remain stable and profitable despite Brexit.
Apartment, Buy to let investments, Commercial property investments, Student Accommodation Investments
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A dwindling pension income and the intlow erest rates that the banks are offering means that individuals are not as financially comfortable as they once were. Our clients are often trying to invest in property to assure another income as they enter retirement. Investing in property, if done wisely, provides individuals with opportunity to supplement their income, alleviating some financial stress they may face. Our team of experts sources the best investment opportunities and our consultants advise and support our clients throughout the whole process, ensuring our clients get exactly what they look for out of the whole experience.