Creative Tip: Use Partial Real Property Interest as Down Payment

Are you trying to buy real estate but you're a little short on cash for the down payment?  There are other ways to structure this transaction, and it's not the "no money down" strategies that you always read about.  You just have to be a little creative and think outside of the box when you are working your way through the real estate acquisition. 

Creative Real Estate Tip

Consider using part of your existing equity in another real property as a down payment on the real property that you’re purchasing.  You can deed a fractional undivided interest in your existing real estate to the Seller of your new property.  And, under the right conditions it would qualify as a tax-deferred exchange under Section 1031 of the Internal Revenue Code.

The Seller of the real property that you are acquiring would become a co-owner with you in your current real property with a fractional undivided interest.  You should of course make sure that you are comfortable with the person since you will both own real estate together for a period of time.