How To Get Started Investing In Real Estate Now With Little Money
So you have heard stories of acquaintances who have struck it rich or retired investing in real estate. You have also seen skyrocketing housing prices. Whatever it may be, your interest in real estate has been peaked and now you want to get started.
There’s only one problem, however.
You have no money.
Oops. What now?
It’s not the end of the world. There are many ways to get started in real estate with little or no money. You can employ the strategies discussed in this article and in time change your
financial situation.
Invest In Real Estate Stocks Or Real Estate Crowd Funding
There are many different ways to get started investing in real estate with little money. If you are looking to invest passively in commercial multifamily real estate and do not have significant discretionary income or savings, you are not out of luck. Investing in stocks of real estate related companies (such as home builders, brokerages etc.) will provide you indirect exposure to real estate. For those that are more familiar with the stock market this may be the easiest and cheapest way to invest in real estate.
To get more direct exposure to real estate you can invest in REIT (Real Estate Investment Trust) stocks. These are companies that are in business solely for the reason of investing in real estate. As a holder of this company’s stock, you get many of the benefits of investing directly in real estate with the feel of a listed equity stock.
If the public stock market is not your thing and you want more direct ownership and benefits of investing in real estate, then you may want to try investing via crowd funding real estate websites. These are websites designed specifically to raise capital for real estate investments. While these are private real estate investments, the rise of crowd funding websites has started to bring more visibility and accessibility to private real estate investments. Real estate crowd funding websites range from accredited investor only offerings to non-accredited investor offerings with small minimum investments.
Find A Private Investor
This piece of advice is more relevant to active real estate investors (as opposed to passive real estate investors). If you are an experienced active investor who may be low on capital, then it may be time for you to consider seeking out private investors. There are many individuals who have money but do not have time to invest in real estate. Given your track record for success these individuals may be willing to provide capital to invest in your deals for a share of the return.
As a new investor you may have more difficulty in finding a private investor that is willing to partner with you. The lack of experience can be fixed by partnering with other active investors that have more experience, starting with smaller projects to build your track record, or connecting with family members who would be willing to invest with you as they already know you and your work ethic.
Take On A Side Hustle To Raise Money
You may only have a little money now but that doesn’t mean things need to stay that way. You can obtain additional employment or start your own side hustle to raise extra money to invest in real estate. Once you have raised that extra capital you can then try one of the other strategies mentioned in this article.
Trade A Skill For Partnership Stake
Do you happen to have a skill that is helpful for an established or new real estate investor? Are you good at digital marketing/content creation? Do you know how to do construction? Are you good at financial analysis? Chances are there is a skill that you have that may be useful to someone who is investing in real estate. The established investor may be great at investing in real estate but may lack the skill you have. Even if they have that skill, they may not have the time to be the one completing the related tasks.
Finding a valuable skill may not be as hard as you think. It may be as simple as living in a target market of that real estate investor where you can do “boots on the ground” in person due diligence to assist that investor. Think through the potential skills or “sweat equity” that you may be able to offer. Chances are that you may be able to strike a deal with an investor where you work for free in exchange for an equity share in the partnership that owns the investment property.
Don’t Get Started Investing - Get Started With Your Education
I mention this last, but it may be one of the most obvious options. One of the first things that comes to mind when most people think of getting into real estate investing is that they will need to actually have money to get started. While this may be true, there is a mindset shift that needs to take place here. When you get started in real estate investing, you should not be laying out tens of hundreds of dollars immediately. Getting started may be as simple as getting educated and then setting up the systems and networks needed to help you be a successful investor.
Investing doesn’t start when you buy that first property, and the money leaves your account. Real estate investing starts long before that. If you are new to real estate don’t rush to buy your first property without setting the proper groundwork. This is not an excuse to do nothing and stay in books or behind your computer screen and never act but rather guidance to take diligent steps toward investing. Education and networking are all parts of real estate investing so even if you have no property under your ownership, you may have already started, and you didn’t even realize.
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