Ever since the launch of television shows like Fixer Upper, House Hunters, and The Property Brothers, general interest in investing in real estate has swiftly risen. However, many are hesitant to pursue such ventures, as they are unsure of where to truly start the process or what it exactly entails.
First and foremost, it is imperative to note that one does not need to utilize their life savings to seize such opportunities. Instead, they really only need to put forth a few hundred or so dollars to get signatures placed on contracts. From there, they can leverage other financing methods to aid them through the process.
With that in mind, let us explore the ways in which one can fund their real estate investment endeavors.
This loan option is certainly not for beginners, as it requires quite a bit of hard money, as well as experience in quickly and successfully converting properties for a profit. However, those that are able to pursue such loans will find that the financial qualifications are rather low, as applicants are only required to hold a minimum credit score of 550.
Still, this financial option is designed to cover not only the cost of the purchase of the home, but of the renovation as well. Therefore, the pressure is on for the team, as they must strive to make a profit and sell the property within one year.
If you are not interested in the flipping aspect of real estate investing, then you may want to look into wholesaling your investments. This short-term process entails locating and purchasing properties that are in need of love and rehabilitation, then reselling them to investors who wish to flip the homes for profit, but do not have the time or ability to search for them on their own time.
The key to finding success in wholesaling investment properties is, without a doubt, strong negotiation skills. After all, you will need to appease your prospective buyers with low prices but still be able to turn a profit yourself, all while compensating any investors who may have funded your efforts as well. Finally, the timeline for such projects is rather intense, spanning anywhere from a few days to one week, so those who are interested in taking this approach must be able to dedicate all of their time and energy to securing a deal.
Clearly, there are some feasible options for prospective real estate investors outside of draining their life savings to put down a 20 percent down payment on every project. However, these tactics are not for those who simply wish to dabble in investing in and/or flipping real estate. So, be sure you are committed to the entire process — less-than-stellar parts included — before making such a commitment.