cannot figure out how to scrape together the capital to get started. Although having wads of cash ready to go is always helpful, you can get started in real estate investing with relatively little capital. Some of the most common ways investors build wealth from the ground up include: 1. Asking for seller financing. 2. Raising capital by trading or selling fixed assets (e.g., cars, jewelry, etc.). 3. Assuming a distressed seller’s mortgage payments. 4. Partnering with another investor. 5. Using a home equity line of credit. 6. Crowdfunding. 7. Borrowing money at a higher interest rate. 8. Getting involved with a peer‑to‑peer lending network. These alternative ways of acquiring cash are a great way to generate $10,000 to invest, a good starting point for building wealth in real estate. You can make money investing in real estate. Real estate investing requires patience, timing, and a willingness to get creative. With just a little capital, you can start building your investment portfolio today. •
7 REAL ESTATE INVESTMENT TRUSTS (REITS) Real estate investment trusts (REITs) work in the same way that a mutual fund does. REITs focus on a specific type of real estate and are publicly traded on the stock exchange, making them a good way for beginning investors to increase the power of a smaller investment. 8 REAL ESTATE LIMITED PARTNERSHIPS (RELPs) Real Estate Limited Partnerships (RELPs) are similar to REITs. They differ in that they are a private investment that occurs when investors pool their money to purchase a more diverse set of properties. These purchases are generally held for a defined period of time (usually five to 10 years). During this time, the group buys and sells properties with an eye to turning a profit during that time
instead of planning to hold and manage them indefinitely. 9 STORAGE SPACES One of the most common (and least discussed) moving expenses is storage space. Nearly 40% of people in the U.S. use storage space, and that trend does not seem to be going away any time soon. 10 MEDICAL OFFICE BUILDINGS Those same aging seniors who need housing also need more medical care, and medical office space is a solid investment. It’s important to note that this type of investment has specific zoning codes. HOW MUCH MONEY DO YOU NEED FOR REAL ESTATE INVESTING? Some potential investors are stalled at the gate because they
Luke Babich is the co-founder of Clever Real Estate, a real estate education platform committed to helping homebuyers, sellers, and investors
make smarter financial decisions. Babich is a licensed real estate agent in the state of Missouri. His research and insights have been featured on BiggerPockets, Inman, the LA Times, and other online and media outlets. Babich earned a bachelor’s degree in political science, with honors, from Stanford University.
14 | think realty magazine :: march – april 2023
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