More Thought about Real Estate Investing for Beginners

Thoughts about Real Estate Investing For Beginners - Part 2

Ok so in the last post on Real Estate Investing for Beginners I covered foreclosures, pre-foreclosures, short sales and REO's. Now I'm going to get into some additional real estate investing methods that are used. I know I said it before - but I want to say it again, as real estate investors our primary goal is to be problem solvers.

Moving along, let's talk about some more techniques that you can add to your toolkit along with the ones from prior posts. Today the theme will be how to start investing in real estate with little or none of your own capital. You're probably thinking how in the heck can I invest without money? Believe me, it's possible. I know because I've done it!

One way to get involved in Real Estate with no money of your own is to identify or "bird dog" good deals. There are investors out there that have the money but don't have the time or expertise to dig up good deals. If you can find a real estate money maker there will be people more than willing to pay you for finding it for them. Join some real estate investing forums and see what people are talking about and what they are looking for. Then go find it!

Investing in real estate notes or mortgages provides another vehicle for starting out. Holders of private real estate notes are sometimes willing to discount the note in order to raise quick cash. The more motivated, the bigger the discount. If you happen to have the cash this is a good way to earn above average returns. If you don't have the cash you can pass the deal to a real estate investor for a "finders fee". Go ahead and Google "investing in notes" to find forums specifically on the subject.

Keeping with the theme of little or no capital investment, obtaining an option to buy a property is a powerful tool that limits your financial risk. By the you can do options with no money out of your pocket and I'll tell more about that in a future post. An option is a contract that gives you the right to purchase real estate at some time in the future for an agreed upon price. Note it gives you the right but not the obligation. Typically you will pay an option fee up front for the right. Your risk will be limited to the amount of the option fee. Should you decide not to purchase the real estate you can simply walk away and you loss is the amount of the option fee paid in advance.

Lease options are similar to options but with the addition of a lease. Lease options are two separate and distinct contracts. One contract for the lease and a separate one for the option.
The lease contract simply means you are entering into an agreement to occupy the property in some form or another. For instance, on a single family home you would probably be living in the home. The option gives you the the right to buy the home in the future.

I'm just scratching the surface of investing in real estate with overviews of just some of the more popular methods but stick with me, I'll get to the details in depth in future posts. Thanks for visiting Real Estate Investing for Beginners and feel free to ask questions.