The Best Ways to Get Into Real Estate Investing

From building a nest egg for retirement to building personal wealth and a legacy for your family, there are many ways to invest in real estate. However, it is best if you focus on only one way to start with. Once you have success with one way then you may want to pursue other ways to invest in real estate. It’s sort of like the game of Monopoly except after for green houses comes a red apartment instead of a hotel.

Below are 4 of the best ways to get into real estate investing depending on your capital to start with, time and desire to be actively involved.

1.) Multi-Family Residential Properties

Quite simply, multi-family is the best way to invest in real estate. You have more control over increasing the value, you have economies of scale, you can have a property manager onsite to handle everything and it is the quickest way to build great wealth!

So, why doesn’t everyone in real estate do multi-family? There is a higher barrier to entry than there is for single family or 1-4 unit properties. Some of these barriers are you need more capital to invest, you need a high net worth to get the loan or know someone who does and have them invest with you or you invest with them. Fewer properties worth investing in on the market, you need to develop relationships to get the best deals or off market properties. The list can go on, but don’t give up hope you can get there quicker than you think. 

Keep reading to learn more ways to invest in real estate. You will be able to work your way up to multi-family in no time.

2.) Single Family or 1-4 Unit Rental Properties

Now, one of the best ways to get into real estate investing is with single family rental properties. If you have $20,000 to $40,000 to invest and have a job or can qualify for a home loan, this is the best way to start. Unlike multi-family you do not need as much capital or a sizable net worth to get started. After a year or more you can do a cash out refinance on the property and use the money to invest in your second single family rental property. Then rinse and keep repeating while at the same time you are collecting passive income month after month which is tax free or tax deferred! See this article for 4 Key Tips for Buying a Rental Property.

Let’s keep going down the list of ways to invest in real estate.

2. Flipping Homes

Another one of the best ways to get into real estate investing is flipping homes. If you have a similar amount of money and qualifications to buy a single-family rental property, you also have the option to flip the property. The biggest difference is that flipping vs renting is that flipping is a job while renting is an investment. See this article about flipping vs renting real estate for more details.

Flipping homes is great for quickly generating capital so that you can move up the ladder faster in the real estate investment world i.e., go to single family rentals or even skip up to multi-family properties.

3. Wholesaling Real Estate

One of the less known ways to invest in real estate is wholesaling. I know many seasoned real estate professionals that do not even know what this is or if they do could not explain it.

This option is desirable for investors who have little to no money or credit starting out, but have time to watch the market and strike a fast deal. Wholesaling is when you put a property under contract and then reassign or resell it to another investor. If your time runs out on the contract, then you have a written-in contingency that allows you to walk away. It’s important as a wholesaler to develop an extensive network of investors. Depending on your hustle you can make many times more than you have ever made in your life wholesaling real estate. 

See this article for more information on how to wholesale without money or credit.

Now you know the best ways to invest in real estate. So, whether wholesaling real estate, flipping homes, or purchasing single-family rental properties you need the right tools of the trade to be successful. One of the top tools of the trade is PropStream that you should check out. 
For more information on the ways to invest in real estate and building your wealth, keep up to date with the realestatewaypro.com newsletter.