Let’s get straight to the point, you want to know How To Invest In Real Estate. You want to do it without losing your shirt. More than that, you want to do it profitably. I’ll give a brief outline below and 4 of the most popular ways to get started investing in real estate.
Invest With Your Own Money
This method is simple. You find a deal, you buy the deal with your own money, and you take all of the profits…or losses. This is the least complicated way to invest because you don’t have to split profits and losses. All the risk and all the reward fall to you. This can be great because you don’t have to share, and it can also be bad for the same reason. One of the biggest negatives about this strategy is that you are limited by how much money you have of your own. When you run out of money to buy more real estate, you just have to wait until you have more to buy more.
Invest With Other People’s Money
With this strategy you are no longer limited with how much money you have of your own. All you have to do is find great deals, and then find people willing to fund those deals. Of course the tough part here is finding deals that are good enough to split and still allow both parties to make money. This is a fantastic strategy for people who don’t have money to start, but they have the knowledge. You’re going to be spending a lot of time looking for deals and talking with people who have the money. Besides finding the deal, you also have to display confidence in yourself so that potential partners or lenders will believe that lending or partnering with you will turn out good. I suggest getting educated really well to ensure that not only do you get people to believe you, but also so that you have the ability to deliver.
Be The Bank
If you are already wealthy, or have gone through the first couple of options and have developed a war chest, this can be a good option. When you don’t want to spend so much time finding deals and figuring everything out, you can be the person who lends money or partners on deals. This allows you to have much more time freedom and gives you the opportunity to do more of whatever you’re passionate about. Because you’re not the one actively finding deals, you’ll have less knowledge of the details of each deal, and you’ll also likely have less control. Because of these two factors, your risk is likely going to be higher. You’ll have to decide for yourself if you’re willing to take higher risks in exchange for more passive income.
Invest In A REIT
Finally, the last option is to put your money into a REIT. This is another version of being the bank. Instead of giving your money to individuals to invest in single deals, you’ll give your money to a large company and they will invest your money into very large projects. These are typically lower risk and lower returns. At least that’s the idea.
In conclusion, when it comes down to it, it’s up to you to do your own due diligence on every deal that you are a party to. Don’t just take someone’s word for something. Do your own research and find out if what people are talking about is right for you or not. Investing In Real Estate is very profitable, and there are more ways than what I’ve gone over today, but this is a good start. Make sure you’ve properly educated yourself before making the jump to purchasing your first property.