Wait, did you just read that right?
You really CAN make money from real estate investing without owning a single property. Stick with me here, keep reading, and I’m going to show you exactly how you can grow your wealth without ever owning a single piece of property.
FORGET WHAT YOU’VE LEARNED IN THE PAST
I run into a lot of would-be real estate investors who assume that you can find-fix-flip a property in 30 minutes and at the end, you will make a ton of money. Thanks a lot HGTV! If only it was truly that easy. The fact of the matter is, because of this assumption, many are investing in real estate and end up owning property with NO WORKING KNOWLEDGE of real estate investing. Eventually, what often times happens is, they end up losing money or even go into foreclosure. This doesn’t mean that real estate investing was the wrong choice. As a former financial advisor, I truly believe that real estate is the best and safest form of investing around. I’ve learned about all of the vehicles: Stocks, bonds, life insurance, annuities, CDs, etc. You just need to learn the different ways to invest and figure out which is the best fit for you and your investing goals.
GETTING STUCK WITH A BAD PROPERTY:
I often come across people who stumble upon a chunk of money or they take their savings that they’ve worked so hard for and put that money into real estate investing, without knowing much of, or anything about it. Let me share a recent encounter with another investor:
This is a scenario I come across far too often: A would be investor calls us desperate to get rid of their property because they “ran out of money.” on the project. We talk about what they want out of the property and how they came up with the number (comps, appraisal, etc). And the response often will go like this: I paid $150k for the property, I also put $30k into the property for repairs, so I’m asking $180k.
Unfortunately, this just isn’t how it works most times. I came across this deal with a SFR I was seeking to purchase this past week for a rental. I was tried explaining to them that as an investor, I’d be looking at losing money every year based on that asking price and the market rents and expenses I can expect to incur annually on the property. I could tell that they hadn’t thought all of that stuff through. They had no clue about real estate investing.
I found myself curious. Why, oh why, would someone put their hard earned money and savings into an investment they hadn’t fully thought through? This happens every…..single…..day. Why? Because real estate is sexy. Cash flow is sexy. You know what isn’t sexy? Being a landlord. It’s a full time job! As if their regular 9-5 gig and family don’t keep them busy enough. Many would be investors come upon a sum of money or have extra money that they don’t want to put in the stock market, IRAs, savings, etc. (can’t say I blame them) The fact of the matter is, you can get steadier and better rates of return in real estate but you shouldn’t rush into it if you know nothing about it.
HOW TO INVEST IN REAL ESTATE THE RIGHT WAY:
So what do you do if you have money and savings that you want to invest? Of course, you want solid and consistent returns and you know real estate is the way to go about it. Well, you have a couple of options:
1. Find yourself a smart, reputable and hard working real estate agent/investor. Like unicorns, they’re hard to come by and I will never let mine go. You just can’t buy investment properties with an agent that has no background or knowledge of real estate investing. Take the time to interview the agent! Ask them what they carry in their own portfolio. Do they work with other investors? Do they have time to work with another? Also, don’t rely just on your realtor. If they truly are a hustler and have property of their own, they’re going to be busy. You have to be educated and know the numbers so that you don’t have to be entirely rely on your realtor to do everything. Learn what it will take to be a great landlord. Not good; great! Go to your local REIA meetings, get tips from others that are crushing the game. If this all seems like too much, then this first option just isn’t viable for you.
2. Get the rewards without the legwork! Say you want the solid and consistent returns, but you don’t have time for all that other education, vetting, networking, etc. YOU ARE IN LUCK! You really don’t have to learn a thing. All you really have to do, is find someone you trust who is experienced and knowledgeable in real estate investing and invest your money with them! Become a lender and better yet, become the bank! You won’t own a single property and you won’t have to take on the full time job as a landlord. You will get great rates of return, though. The question is, how do you find these people? Couple of key things to find out:
Who do you know in your area that does real estate investing? Who are the players? Check out a few local real estate investing meetings and find out. (Look in MeetUp.com) Then interview them! Fire questions at them about everything and anything you wanted to know about real estate! Ask to see their portfolio.. and most important; ask to see the numbers. Have them show you not only what they own but how these properties cash flow, what their profit is on rehab projects etc. Ask for references. They can give you names of other people just like you that lend them money for returns! They should be able to tell you how the lending process works, give you information on lending from savings, lending from an IRA, etc. etc. Think of it as a prospectus for the person.
You should now determine which option is best for you and take action and never stop learning because this real estate game can produce profit for anyone! Just remember you don’t have to become a landlord or fix and flipper to do it! Be sure to check us out on Facebook, Instagram, YouTube and all that stuff if you aren’t already. If you’re interested in working with us, we’d be glad to sit down and talk with you to learn more about your goals and see if there’s a good fit to work together.