7 Ways to Get Started Investing In Real Estate
With over 20 years investing in real estate and managing my own properties, I’ve figured out that there are 7 ways to get started investing in real estate.
In this article I want to share a few things with you about how you can get the ball rolling.
Check out the video below for wholesaling tips and tricks
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Here Are 3 Things to Consider First
First, figure out what your end goals are, and write them down. Click here for a great article on how to develop your goals.
Second, consider such things as the location and types of property you are interested in. Are you wanting to invest in commercial property, land, single family homes, duplexes, triplexes, or apartments?
Moreover, consider the potential cash flow of the properties you are considering, what financing you have at your disposal, understanding the conditions of the property, and the cost to raise the value of the properties.
Thirdly, think about how much money or financing you will need to invest, the purchase price, and the potential selling price of the market you’re buying in.
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Another thing you may want to do is go to a bank and get a pre-approval. This way you know your financial options.
Also, it helps to either have cash or good credit. It’s not 100% necessary, but it makes things a bit easier.
It sounds like a lot to think about up front, but that’s just the beginning.
With all of that complete, now you can begin to decide exactly HOW you want to actually get into the game of real estate investing.
7 Ways to Get Started Investing In Real Estate
1. Primary Residence
Purchase a property and live in it. You can live in it forever or sell it and tap into the equity in an effort to make another financial move. You can sell it or keep it and rent it out in 2 years.
In 2 years you will have 2 properties, and do it 2 year later and in 4 years you will have 3 properties.
Or simply purchase a duplex or triplex, and live in one of the units and rent out the other unit, or units. This can be a great way to get into real estate and has proven successful for many.
2. Lease to Own a Property
You can lease a property with the intent to purchase the property. It’s possible to locate owners that want to lease their property and potentially sell it down the road.
Often times you can sublease without living in the property. This involves having a master Lease, which means you have the option to sublease the property to someone else.
In other words, the spread between what you lease it for and what you sublease it for, is the money you receive monthly.
3. Find Properties For Other Investors
They used to call this “bird dogging”. You can earn money doing this, but it takes time. Look for motivated sellers and undervalued properties.
You pass this along to investors and charge those investors a fee.
It helps you hone your skills for finding deals, helps you learn and understand the real estate market in your area, and it teaches you how to deal with buyers and seller.
4. Find a Partner
Some people don’t have the time, but have the money. Other people don’t have the money, but have the time. There there are those that don’t have the knowledge, but have the money.
So you may want to find people, friends, family, or other investors, that will go in with you to invest in property.
Perhaps pooling your money together with others would help you get the capital necessary to invest in real estate. Click here to check out why pooling your money is a serious power move.
5. Wholesaling
Find properties on the cheap, putting them on a 30 or 45-day contract with a contingency based on an inspection and acceptance, and, in the interim, find investors to purchase the property.
Here is how wholesaling works
You buy a property that is worth $100k, but you agree to buy it for $50K from a motivated seller. You put it under contract with the potential for purchase in 30 to 45 days at that 50K price.
In the meantime, you find an investor to purchase the property from you for $75K. You buy it for $50K, sell it to the investor for $75K, and therefore you make $25K.
Check out the video below
6. Flipping property
Buy and sell high. You buy a distressed property at a discounted price, make repairs, fix it up with a little curb appeal, and sell it for the full retail price.
The math on this is pretty simple, but it’s a great way to get your feet wet in the real estate game.
There is a level of expertise needed to pull this off successfully but many have done it and it’s a great way to start in real estate.
7. Buy and Hold
The buy and hold strategy is a long term play and is always a sure bet in the real estate game. You buy the property and rent it out.
This one is my favorite and it’s one that I’ve used to grow my net worth.
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You have to determine rental rates, pre-screening and screening tenants, whether or not to use a property management company, and much more. Click Here to get 7 tips to pre-screening tenants.
I’ve only mentioned 7 ways to get started investing in real estate, but there are many others.
The beauty of real estate is that there is something in it for everyone, and this is why it’s been one of the most popular ways to make money this world has ever seen. And it’s one of the most lucrative.
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