There are numerous ways of investing in real estate. Since you are just getting started, it’s important for you to know at least the names of some of the many ways to profit from real estate. For our initial introduction, I’m simply going to list the major areas of interest.
At some point, I will show you how many of these techniques work in real situations. What will be most important for you now is to select the two or three areas of current interest and then focus on those areas; at least while you’re just getting started. The overall areas (not listed in any order of importance) include:
42 Ways To Invest In Real Estate
- Rehabbing fixer-uppers or junkers and then selling as a pretty property
- Flipping fixers to a rehabber for a modest mark-up
- Buying pretty property at below retail market prices
- Optioning property for a period of time during which you find a buyer
- Leasing a property with the option to buy at a later date
- Investing in Tax Liens
- Buying Tax Deeds
- Buying (and selling) discounted paper (mortgages, Trust Deeds)
- Negotiating short sales with lenders
- No money down (at least not your own money)
- FSBOs (For Sale By Owner)
- Getting the owner to just give you the deed (title) to the property
- 1031 Tax-deferred exchanges
- Bank REOs (real estate owned) – non-performing assets
- NODs (Notice of Default) (Preforeclosures)
- Prefabricated modular structures
- Storage rentals
- Shopping centers
- Industrial buildings
- Raw land and land development
- Real Estate Investment Trusts (REITs)
- Mutual Funds specializing in real estate investments
- Real Estate Limited Partnerships (RELPs)
- Section 8 HUD- and VA financed properties
- Resort Condos
- Second- and vacation houses
- Condos as everyday residences
- Buying your own island, castle, any unusual or exotic property
- Hotels and Motels – the real estate; not the business itself
- Specific-use real estate such as gas stations, car washes, restaurants
- Office buildings
- Real estate auctions
- Time shares
- House exchanges
- Condo conversions
- Parking lots
- Foreign Real Estate (Outside the USA)
- Develop “Infill” lots (Vacant lots in developed neighborhoods)
- Lease Post Office facility to U.S. Government (Well…maybe not anymore)
- Bed and Breakfast
I realize you probably don’t completely understand what the above list represents but by the time I finish with you – you will know how each works. The reason I caution you to pick only one (2 or 3 maximum) for starters is that you need to learn a couple of areas thoroughly before you expand into other areas.
Active vs Passive Investing
Additionally, some of the above require “active” participation by you while others are considered “passive” income generators (PIGs) requiring almost none of your time. You’ll need to decide how much time you’re willing to devote when you first start out.
Ultimately, you’ll want to become familiar with all of the above because you won’t want to pass-up profit opportunities as they present themselves to you in the future.
How To Start Investing In Real Estate
Finally, start at the bottom; the beginning; the first level. Regardless of how much money you now have, if you have no real estate experience, start small. Yes, many beginners have been lucky with large projects in hot markets, but that’s not how to push your luck.
If you don’t bite-off more than you can comfortably chew, you won’t be panicked when something goes wrong. If nothing can go wrong, it will go wrong and at the worst possible moment, so be forewarned.
One final caveat to start: Do NOT tell your friends or co-workers what you are planning to do! They will always tell you “it can’t be done.” You don’t need this kind of grief. Just do it first and then let them observe that it is possible.
Author Note: This is just the beginning, I wrote a book, “Pssst – Wanna Be a Real Estate Millionaire?” to familiarize investors like you with all of the techniques you can use to purchase- or make money in real estate. I plan on sharing it freely and take you step-by-step through as many transactions as possible so that you will know what to expect in each instance.