The current strong economy in the United States is affecting virtually every financial investment market type, and real estate is no exception. There are also many more people who have jobs, creating a new pool of investment wealth that can be moved into real estate. The problem for many people who are now interested in property investment is they believe that they do not have the cash to actually enter the market. The good news is this is not true.
What you will read about is just one of many ways you can get invested and make a profit buying and selling real estate with just $1,000. The process is actually simple, but you will need to do some learning on your own and become familiar with not only the real estate market in general, but specific opportunities available in your area. It will also help if you have a solid knowledge of real estate laws in your state, county, and municipality since they can be very different from one location and another. To become a serious investor your first investment needs to be in the time spent understand how your investment world works.
Once you are comfortable with your own level of knowledge, the next step is to realize the potential in creative financing. It is this strategy that will open up the door for future opportunities. The concept behind creative financing is to connect your money with other available pools of money, increasing your actual cash availability of reinvesting.
The key phrase to know is that when it comes to real estate, having a “deal in-hand” is the goal. You don’t need $1 million as much as you need an available deal. A deal can be converted into a profit in a number of ways, so the serious real estate novice will always be actively on the lookout for available deals. Having some cash in hand is always a good idea for reasons that will be explained later, so this article is not about becoming a successful real estate investor with $0.
Once you have a great deal in-hand, your next step is to find a partner who will be willing and able to fund it. People new to the real estate market think this is an unrealistic approach, except that what you need to understand is that no one knows everything about all the available deals. That is why knowing your local market can be a huge advantage. But remember, it has to be a great deal since you are asking someone who is likely to be a complete stranger to go in with you on the deal. A great deal here is better than a good deal because it provides another level of financial security and potential profit.
Another possibility is to find what is called a hard money lender. These are people or financial institutions who have ready cash and will not only put up the money to buy the property but to fix it up as well. Let’s say you have a great deal on a home that is being foreclosed on, and while you can afford to buy the property, it requires some serious repair work to turn a profit. In comes the hard money lender who you can lend you the necessary money to not only fix up the place but is willing to buy the property from you. In other words, you can negotiate a deal for the deal, and give up the property yet collect a nice profit after the hard money lender fixes up the property. You will want this in writing (of course) but again, finding the deal ends up being more valuable than the cash you have in your bank.
One thing you need to be careful about is another piece of real estate jargon called “skin in the game.” Any potential partner will want to know if you’re actually serious about being a real estate investor – especially if you are just starting out. You want to demonstrate that you are serious by being willing to put up your own cash, even if it is only $1000, so if the investment goes south you stand to lose as well. Yes, it is a trust thing, but in the world of investing trust is a huge commodity and asset.
What you should take away from this is that there are multiple ways to make money investing in real estate and not need a ton of cash. If you prefer making 2 percent interest in a savings account you can do that, but real estate has recently been outperforming the stock market. The opportunity is there for you to make a hefty return on your investment while having the security of a physical asset to show for your trouble.