Real Estate Investing Ideas?
January 5th, 2009
Bipolar Teen. asked:
Okay. I have spent all afternoon thinking about different creative ways to invest in real estate. When I step back and look I realize that with each plan I came closer to being that guy on late night television. So I am going to ask for help. Here’s what I have to work with. I have $2000. I would like to build cash flow but I would’nt complain about getting a lump sum. So I need help with a gameplan I can do working nothing more than $2000. I have read articles on reiclub.com and creonline.com and I just cant seem to put together a plan that makes since when I try to work it out. So please dont just say lease option, subject-to, land contract- I would like a general example and your experience with it would be great too. Thanks in advance for your responce!
Okay. I have spent all afternoon thinking about different creative ways to invest in real estate. When I step back and look I realize that with each plan I came closer to being that guy on late night television. So I am going to ask for help. Here’s what I have to work with. I have $2000. I would like to build cash flow but I would’nt complain about getting a lump sum. So I need help with a gameplan I can do working nothing more than $2000. I have read articles on reiclub.com and creonline.com and I just cant seem to put together a plan that makes since when I try to work it out. So please dont just say lease option, subject-to, land contract- I would like a general example and your experience with it would be great too. Thanks in advance for your responce!
Well, the options you mentioned are the BEST way to get started, especially with the amount of money you have. My best advice, since you found the rei clubs, JOIN ONE. You’ll meet investors there with experience in what to do and what not to do. Don’t fall pray to the “wholesaling” scam that they try and make seem is so easy to do. If it were that easy to sell a house, the country wouldn’t be in the trouble it’s in right now. If it sounds too good to be true, it probably is.
You may want to do some research on contract assignments, bird-dogging, whatever you do, make sure it’s LEGAL. Laws vary from state-to-state, so be sure to double check what your doing with your states laws.
There are hawks in those groups, so you have to be careful. Learn ways to calculate expenses, and a maximum offer price. Research, research, research…but keep in mind…until you START, COMPLETE, and SELL your first deal you won’t make any money.
Go onto creonline.com and find a group in your area, go to a couple of them as a guest before you buy a membership, pick the one you like the most, and join. I joined my first REI group about 5 years ago now, and have done 10 deals. I’ve never borrowed one red cent. It can be done!!
If you’re in the NC or SC area, feel free to message me and I can point you in the right direction finding groups, message boards, online groups, all kinds of things. You can learn something from everyone.
Hope this helps!!
Invest in a good REIT.
What don’t you just buy shares of a REIT. That’s a real estate investment trust. I don’t think $2000 is going to get you very much otherwise. Unless you can afford to mortgage a property. Stick to commercial, retail, or industrial sectors REITs. REITs are trading under value right now so should be a good time to buy. They are required to pass the majority of their profits on to their shareholders.
Find properties that look undervalued, even at the asking price. Negotiate a discount to that asking price. Then offer something like $200 to buy an option on that property - the exclusive right to purchase it at that price for a period of say 90 days. Make sure that you have the right to assign the option to another party and that the property owner is okay with this. It may be challenging to get owners to go along with this but think about it - many owners give brokers a 180 day exclusive and receive nothing upfront. Vacant land that has been sitting on the market a while is a good candidate for this approach.
Then, contact better-capitalized investors and ask them to buy the option from you. If you’ve negotiated an excellent deal, someone will buy it from you at a profit. If not, you’re out $200 instead of the thousands you might have spent buying outright. Your $2000 gives you ten tries to get it right.
This is just an idea I’ve been considering. Have heard it several times in different formats but have not tried it yet. There may be some legal issues in some states, talk to someone local to your area (you can often learn a lot just during a free initial consultation).
Please drop me a message if interested in working together or if you find any deals like this.