![]() You would have to live in the property for at least a year, however. For example, she bought her first home with one in 2009 with a 3.75% down payment. If one doesn't want to take either of the routes mentioned above, Spinelli recommends buying a home with an FHA (Federal Housing Act) loan, which allow buyers to purchase a home with an extremely low down payment. This is one way of executing the BRRRR strategy, an acronym for buy, rehab, rent, refinance, repeat. With the property value higher after the rehab, they took out a cash-out refinance from a bank, paid back the hard-money lender, and put a tenant into the property whose rent payments would go towards paying back the cash out refinance. When the Spinellis used a hard money lender, they borrowed enough to buy the property and fix it up. By comparison, current data from Mortgage News Daily shows the average 30-year fixed mortgage rate is around 7%. According to Rocket Mortgage, average rates on hard-money loans in May 2022 were between 8-15%. Hard-money lenders offer quick access to cash with fewer hurdles than getting a loan from a bank, but interest rates are higher and loan terms are shorter. The other no-money-down method the Spinellis used was to borrow money from a hard-money lender. ![]() The property's value had appreciated to $85,000 over that time, she said, and so they took out $60,000 of equity through the refinance, repaid the remaining credit card balance of $40,000, and then used the leftover money for other down payments. Over the course of the first year, they got the balance down to $40,000, and then decided to take a cash-out refinance out of the home. This is because the credit cards they used were zero-interest for a year or more, and they immediately began paying back the balance with rent payments when a tenant moved in. While this sounds risky, as credit card debt can quickly compound and over one-third of Americans carry an ongoing credit card debt balance, the Spinellis took a low-risk approach. They then used business transaction firm Plastiq to pay the title company for the property. The site allows would-be investors to pool money from multiple credit cards to put towards a property. To do this, they used a service called Fund & Grow. One is a strategy that many probably don't realize is even possible - they bought a $60,000 property using credit cards. And to get there, they've used a couple of financing strategies that have allowed them to purchase homes without their own money. Today, the couple has a portfolio of 26 units, according to property title documents viewed by Insider. There was only one problem: they had limited funds to put toward a down payment.īut that didn't stop them. She and her husband Joe already had a couple of properties under their belt, but they wanted to continue scaling up. There are other cheap ways to buy properties, like getting an FHA loan, she said.īack in 2018, Camille Spinelli decided she was going to use real-estate investing as a pathway to financial independence.She shared two that involve no money down: using hard money loans and credit cards.Camille Spinelli has used multiple strategies to acquire properties. ![]() Account icon An icon in the shape of a person's head and shoulders.
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