If you don’t have a ton of money saved up, you might think that investing in real estate is out of reach. But thanks to a new policy implemented by Fannie Mae, investors are now able to purchase an owner-occupied two-, three- or four-unit home for just a 5% down payment. Formerly, Fannie Mae required a 15% to 25% down payment.
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Why Cardone Is a Fan of the New Fannie Mae Policy
Because of Fannie Mae’s policy, it’s easy to get started investing with just a few thousand dollars.
“The Fannie Mae regulation allows an individual to buy a four-unit property that’s $100,000 with only $5,000,” Cardone told GOBankingRates.
If you don’t have $5,000, Cardone recommends borrowing the money to be able to take advantage of this new opportunity.
“You don’t have to personally have the $5,000,” he said. “You could have your mom, your dad, your uncle, your aunt, your brother, your sister, somebody give you the $5,000. You can have your employer advance you the $5,000 against your salary for next year.”
How To Find the Best Property To Invest in With $5,000
“None of this happens without the property,” Cardone said.
You must find a multi-unit property that qualifies for the loan, and have it approved by Fannie Mae.
“Fannie Mae is trying to make housing affordable,” Cardone said. “This is a way for them to do that, where the individual would now live in one unit, pay rent there and collect rent from three other people, and then use the rent from all four to basically have positive cash flow.”
Cardone will be going over the specifics of how to find these properties during his 2023 Real Estate Summit, which is being held on Dec. 16-18.
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This article originally appeared on GOBankingRates.com: Grant Cardone: Here’s the Best Way To Start Investing in Real Estate With $5,000
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