Many people are interested in investing their money in real estate, but so few know where to start. It’s best to understand the basics of real estate investing, before diving too deep in any particular strategy.
There are many real estate investing strategies, but there is one specific strategy that allows you to invest in real estate with little to no money.
There is a reason 90% of millionaires invest their money into real estate – many reasons actually! Earning monthly cash flow or passive income through rental properties will help set you reach financial freedom. Loan paydown and appreciation will build up your net worth.
The thing that makes real estate investing so unique is leverage – you can leverage other people’s money, and start reaping the benefits immediately.
I would also recommend you read as many real estate books, blogs and articles as possible. Education is how you form the foundation. Some of the books I recommend to get started are:
Rich Dad, Poor Dad – Robert Kiyosaki
Cash Flow Quadrant – Robert Kiyosaki
The Millionaire Real Estate Investor – Gary Keller
I’d also recommend you create an account on Bigger Pockets – this is a great place for reading on blogs and forums, networking with other investors, asking questions, finding mentors, meeting real estate agents, property managers, and much more.
Some other tips for beginner investors:
– Begin building your credit
– Save up as much money as you can each month – cut out unnecessary expenses and even work a side hustle if you need to
– Work with a lender or loan officer to get an understanding of the loan process and how it works
– You will need to show your taxable income, because the lender will eventually need to pre-qualify you for a loan – they will need to look at your income and more specifically, your debt to income ratio
– Begin to study the markets you either live in or are interested in investing. I recommend reaching out to real estate agents that work with investors, as they may have the pulse on the market.
– Get a pre-approval letter from the lender, showing that you qualify for the loan
– Begin to make offers on properties that meet your criteria
The number one strategy for a new real estate investor, in my opinion, is to purchase your first primary residence (either a duplex or single family home with multiple bedrooms), and rent out the unoccupied rooms. This way, you can pretty much offset what is more than likely you largest living expense – your mortgage – and sometimes even make enough rental income to cash flow each month. Imagine that – getting paid to live in your own house! This is great for many reasons…
– Eliminate your largest monthly expense
– Live for free
– Have others pay your house off for you
– You keep all the equity in the house and reap all the benefits of appreciation
– Cash flow – new income source
– All these benefits will allow you to save up even more money each month and prepare for your next investment that much faster