Are you new to real estate investing? Learning how to invest in real estate doesn’t need to be complicated, difficult, or expensive. In this beginner’s guide, you will learn how to get started investing in real estate from beginning to end—with no hype, false promises, or pitches.
Ninety per cent of all millionaires become so through owning real estate.Andrew Carnegie
Why Invest In Real Estate?
There are many places you can put your money besides underneath your pillow, including in stocks, bonds, savings, mutual funds, CDs, currencies, commodities, and of course, real estate investments. There are positive and negative aspects to each investment option, but since we’re here to learn about real estate, we’ll focus on that and that alone.
One of the most commonly stated reasons people give for investing in real estate is that they are seeking out financial freedom, but there are others, as well. Of course, each person will have his or her own personal reasons. They are typically seeking one or several of the following:
- Cash Flow
- Tax Benefits
The decision to begin investing in real estate is a personal one, and we absolutely recommend that you make sure you and your family are 100 percent committed before deciding to move forward in doing so.
Can I Invest in Real Estate if I Have a Full-Time Job?
Yes. The kind of real estate investing you see on television or may hear about from a guru is not the only kind of real estate investing there is. In many situations, the kind of investing you see on TV is not even investing at all, but rather gambling or speculating.
The truth is, there are hundreds of ways to make money in real estate. Some of these techniques or strategies may require 40 hours a week, while others may only require 40 hours per year. The amount of time it takes to grow your real estate business largely depends on your investing strategy, your personality, your skills, your knowledge, and your timeline.
You’ve probably heard the famous question (perhaps from your high school guidance teacher or parent), “If you suddenly had one million dollars and didn’t have to work anymore, what would you do?” The answer, some say, reveals what career field you should enter.
Would you invest in real estate?
If your dream path is to open up a shelter for abused animals you probably should not become a full-time real estate investor. That’s not to say that you shouldn’t invest in real estate you just probably shouldn’t go full time.
However, you don’t need to make it your career in order to build wealth in real estate. If you love your job, you don’t need to quit it to invest in real estate. You can achieve the same (or better) results by investing on the side, same as you would as a full-time real estate investor.
Advantages of Investing While Working a Full-Time Job
By keeping your day job, you have several advantages over a full-time investor. First, you do not need to live off the cash flow you make—that’s what your nine-to-five is for. By reinvesting all the profits from your investments, you can fully realize the incredible benefit of exponential growth. Additionally, you have a much easier ability to get long-term bank financing thanks to the stable income from work, which can also help increase and stabilize your wealth building.
You can invest in real estate while keeping your day job by doing the following:
- Partnering in a larger piece of property
- Investing in a buy-and-hold property with property management
- Serving as a private or hard-money lender
- Investing in notes (mortgages)
Real estate can be highly profitable whether it’s your career or you’re just investing while working a “normal job.” However, the choice is yours as to which path you take. Don’t simply decide to quit your job and become a full-time investor because you read about other investors who have been successfully doing it that way. Having a concrete plan for how you’re going to proceed in real estate is essential; we’ll get into that a little later in the guide.
That said, life is too short to be stuck in a job you hate. Choose a career that makes you excited to wake up in the morning, energized throughout the day, and content when you fall asleep at night. If that desire leads you to full-time real estate investing, welcome to the club! Just make sure you are not simply building a career, but building a future.
Can I Invest in Real Estate if I Have No Money?
No Money Down. The simple answer is: yes, it is possible to invest in real estate if you don’t have any money at all. However, money is involved in every real estate transaction. The issue, therefore, is not whether you’re investing with “no money,” but instead whether you’re investing with “none of your own money.” Investing in real estate without using any of your own money requires using Other People’s Money (OPM). Learning to strategically invest in real estate without any of your own money is one of the most complex, but important, tools you can develop in your real estate investing career.
The key to investing in real estate without any money of your own is simple: bring something to the table. If you lack money, there are other things you can bring to the table in a transaction—if structured correctly—including education, time, connections, confidence, intelligence, and creativity. By reading this guide, you are already taking steps toward building your strengths in those areas.
Many investors use little or none of their own money when investing in real estate. They’re able to achieve this by using one of several methods, including:
- Using partners
- Using lease-option strategies
- Via FHA (3.5 per cent down payment) loans
- Using USDA or VA (no down payment) loans
- With home equity loans or lines of credit
- Using private/hard money
We will look at each of these options in more depth later in this guide, but we want you to recognize that investing in real estate without income is possible. It just may not be as easy as the gurus would have you believe.
Just not to confuse you, I am going to leave you here till next time with some more insights about real estate investing.
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