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Ways To Get Started In Real Estate Investing For Under $500
Its no secret we are currently In an incredibly hot real estate market. With so many people looking to not just buy their own personal home, but also new investors entering the scenes of the real estate investment market, its getting tougher and tougher to find quality deals for a reasonable price.
So if your new to the scene and want to get started without forking over all your savings along with your arm and a leg, without any contingencies here are a few ways to begin for under $500.
Crowdfunding
With the emergence of this sharing economy and the prevalence of real estate investing technology its getting easier and easier for real estate investors to fund their deals through crowd funding platforms. Being on the other end of these platforms can allow for an easy entrance into the real estate investment market. While some platforms have some fairly high minimum investments or you have to be an accredited investor others are much more friendly to those getting started. There are numerous examples but they can range anywhere from $10 for a minimum investment to $500 for a minimum investment. Sites and apps like DiversyFund, Arrived Homes, or Groundfloor allow users to invest in others real estate investments for minimal contribution, and they boast some pretty attractive returns as well. All in all these could be some great ways to start your real estate investing career.
Along with building your wealth you get to learn how other investors structure their deals and you get lessons on the lingo of real estate investors. Getting to see what deals are attractive enough to get other people to invest in them is a powerful skill for you to have as you grow. That way when you find the deal you can either have the capital ready to go or go out an talk to others and explain to them why the investment is a good investment.
Wholesaling
I will start this one out by offering a warning of my own personal bias. Don't act like a slime ball and don't spam! That said lets discuss wholesaling. Basically you find a good deal, you get it under contract and then you sale it to another individual for a little more or you assign the contract to another buyer for a fee. I'm not going to get into the strategies of wholesaling here but that's the basic idea.
When I say don't be a slime ball or a spammer this is what I mean. A lot of wholesalers will try to present everyone they have ever talked to with every single "deal" they come across. There are two points wrong with this from my perspective. First I wrote it "deal" because a lot of the "deals" that are presented to me don't pencil out when I analyze them. So if you want to get into the world of wholesaling make certain the deals you present actually have enough meat on the bone for the person you intend to sale them too. Second this shotgun approach to deal presenting is off putting. I look for specific property types in specific markets, I currently have wholesalers sending me deals that are hours away from my target market. So if you want to whole sale then take the snipers approach. Talk to your potential buyers, find out what they want and only present them with a deal if matches with what they want! If you present them with something and they say no or don't respond then ask them why and refine your presentation criteria accordingly. The last thing you want to do is be an annoyance to your potential buyers.
I say this as a person who is on many wholesalers lists, I am not a wholesaler nor have I ever been so some of these "gurus" may tell you to do exactly this but I can tell you from this side of the deal I find it incredibly annoying and I bet I'm not alone.
Partnerships
This one is super simple, find someone that you want to work with. Ask them what they need, then deliver them a remedy to their pain. Some of the biggest challenges that larger scale investors are facing currently are deal flow, and finding quality contractors. They will have other problems as well but these are pretty much the standard problems that everyone has. Tell them you are willing to work and provide them that solution for a cut of the deal and the ability to learn from them. Obviously this has some hurdles you have to overcome, potentially not being paid for a while, finding a someone who will work with you like that, and of course you have to have the skills that they require. But if you can match your strengths to someone else's weakness you could create a great partnership and while it may not be a 50/50 partnership, if you could receive 5% of the cashflow of multiple streams of income for a few hours of your time each week. That could be a powerful start to your investing journey.
Conclusion
I you are getting started you need to take action and put some money on the line. Risk and investing is like a muscle, the more you do it the stronger you will become. If i was starting over in todays environment I would probably begin by investing in some of the crowd funding platforms. a lot offer 9, 10, even 12% returns. That is pretty good! While your doing that you can learn from those platforms as well as others, you can begin doing the wholesaling method if you wish or begin looking for ways to partner in others deals.
No matter what path you choose just make sure to stick with it. The hardest pat is getting started so if your reading this you probably already overcame that now you need to take the next right step for you.
One last thing, I am not a financial advisor or a lawyer so nothing in this article is a recommendation to do anything, these are simply my views as a real estate investor. Happy Hunting!
Crowdfunding
With the emergence of this sharing economy and the prevalence of real estate investing technology its getting easier and easier for real estate investors to fund their deals through crowd funding platforms. Being on the other end of these platforms can allow for an easy entrance into the real estate investment market. While some platforms have some fairly high minimum investments or you have to be an accredited investor others are much more friendly to those getting started. There are numerous examples but they can range anywhere from $10 for a minimum investment to $500 for a minimum investment. Sites and apps like DiversyFund, Arrived Homes, or Groundfloor allow users to invest in others real estate investments for minimal contribution, and they boast some pretty attractive returns as well. All in all these could be some great ways to start your real estate investing career.
Along with building your wealth you get to learn how other investors structure their deals and you get lessons on the lingo of real estate investors. Getting to see what deals are attractive enough to get other people to invest in them is a powerful skill for you to have as you grow. That way when you find the deal you can either have the capital ready to go or go out an talk to others and explain to them why the investment is a good investment.
Wholesaling
I will start this one out by offering a warning of my own personal bias. Don't act like a slime ball and don't spam! That said lets discuss wholesaling. Basically you find a good deal, you get it under contract and then you sale it to another individual for a little more or you assign the contract to another buyer for a fee. I'm not going to get into the strategies of wholesaling here but that's the basic idea.
When I say don't be a slime ball or a spammer this is what I mean. A lot of wholesalers will try to present everyone they have ever talked to with every single "deal" they come across. There are two points wrong with this from my perspective. First I wrote it "deal" because a lot of the "deals" that are presented to me don't pencil out when I analyze them. So if you want to get into the world of wholesaling make certain the deals you present actually have enough meat on the bone for the person you intend to sale them too. Second this shotgun approach to deal presenting is off putting. I look for specific property types in specific markets, I currently have wholesalers sending me deals that are hours away from my target market. So if you want to whole sale then take the snipers approach. Talk to your potential buyers, find out what they want and only present them with a deal if matches with what they want! If you present them with something and they say no or don't respond then ask them why and refine your presentation criteria accordingly. The last thing you want to do is be an annoyance to your potential buyers.
I say this as a person who is on many wholesalers lists, I am not a wholesaler nor have I ever been so some of these "gurus" may tell you to do exactly this but I can tell you from this side of the deal I find it incredibly annoying and I bet I'm not alone.
Partnerships
This one is super simple, find someone that you want to work with. Ask them what they need, then deliver them a remedy to their pain. Some of the biggest challenges that larger scale investors are facing currently are deal flow, and finding quality contractors. They will have other problems as well but these are pretty much the standard problems that everyone has. Tell them you are willing to work and provide them that solution for a cut of the deal and the ability to learn from them. Obviously this has some hurdles you have to overcome, potentially not being paid for a while, finding a someone who will work with you like that, and of course you have to have the skills that they require. But if you can match your strengths to someone else's weakness you could create a great partnership and while it may not be a 50/50 partnership, if you could receive 5% of the cashflow of multiple streams of income for a few hours of your time each week. That could be a powerful start to your investing journey.
Conclusion
I you are getting started you need to take action and put some money on the line. Risk and investing is like a muscle, the more you do it the stronger you will become. If i was starting over in todays environment I would probably begin by investing in some of the crowd funding platforms. a lot offer 9, 10, even 12% returns. That is pretty good! While your doing that you can learn from those platforms as well as others, you can begin doing the wholesaling method if you wish or begin looking for ways to partner in others deals.
No matter what path you choose just make sure to stick with it. The hardest pat is getting started so if your reading this you probably already overcame that now you need to take the next right step for you.
One last thing, I am not a financial advisor or a lawyer so nothing in this article is a recommendation to do anything, these are simply my views as a real estate investor. Happy Hunting!
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