Debunking real estate investment

By Cornelius Jackson

DEBUNKING REAL ESTATE INVESTMENT MYTH IN IRVINE:

IT ISN’T IMPOSSIBLE WITH LITTLE TO NO MONEY DOWN

With the median sales for a property in Irvine, CA pegged at $ 921,895 - almost a million dollars - the misconception that you have to have a lot in your pocket to embark on real estate investment in the city is understandable. However, regardless of what you see on TV shows like Fixer Upper: reality often presents a different story. And though it is usually assumed that real estate investing, especially in cities like Irvine, is for the rich kids, here’s a Reality check: You do not have to have a lot of money down if you want to get into the real estate investment. Read on to find out how!

WHAT IS REAL ESTATE INVESTMENT?

If you are a newbie, you might be wondering what investing in real estate is all about. Real estate investing simply refers to all operations that go on in the business with the intention of making a profit in the long run, including the purchase and management of properties for future sales or rentals. That applies to the various categories of real estate, from residential properties to commercial, special-use, and land properties. Two well-known characteristics of real estate which investors take into consideration are that:

• It has relatively limited liquidity. • It is capital intensive.

For that reason, beginners and persons unfamiliar with the terrain presume that one needs massive funds down before one can invest in the industry. However, moguls would tell you otherwise: that such isn’t impossible. All you need is the know-how, and that is what you would be learning here.

WAYS TO INVEST IN REAL ESTATE WITH LITTLE OR NO MONEY DOWN • Form a Partnership

If you have limited funds to invest in real estate and are new to the business, forming a partnership might be your best bet. It involves partnering with other real estate investors who would provide a large portion of the financing to purchase a property.

Note that to succeed at attracting partners, you must be willing to undertake to do most of the work: doing proper market research in finding properties with attractive ROI, purchasing, and management. On the flip side, these investors are usually more seasoned and experienced, so it is a win-win relationship.

• House Hacking

House hacking is a top real estate investment strategy anyone can take advantage of and is a great idea when you do not have much money to invest. And what’s more, you can legally house-hack a property you reside in - which is mortgaged. If the property has multiple units, you can have one as your primary home and rent out the others. If it’s a single-family home, you can still rent out a bedroom or basement. The income you collect from the rents can then pay for your mortgage and perhaps renovations on the home, thereby increasing its market value.

Nothing comes close to house hacking when it involves killing two birds with one stone: clearing your mortgage debts and starting real estate investing from scratch.

• Private Equity / Crowd Funding

If you have a low credit score, or you want to avoid financial institutions and debts as a whole, you should consider private equity or crowdfunding. In private equity, you can reach out to venture capitalists if you have mapped out a brilliant business model for real estate investment and are willing to kick-off a startup company to that effect. These investors would consequently own an agreed portion of the shares and the profits they generate.

In crowdfunding, you can reach out to as many people as possible through publicity strategies that would be willing to invest a specified amount - usually a little bit of money - with a given ROI.

If you are going to undertake this path, know that it takes a lot of grit and dedication. Nonetheless, many successful real estate investors started this way as well.

• Real Estate Wholesaling

Can you invest in real estate without even purchasing an investment property? The answer is Yes! - through real estate wholesaling. All this strategy requires is for one to be highly opportunistic: you find a property that is being sold under market value, put it in a contract, and find a buyer willing to sign up for it. Then you earn your cut for quickening the process.

To be successful with this method, it is vital that you have eyes and ears everywhere: a broad real estate network and easy access to info on cheap-selling avenues like bank sales and foreclosed properties.

References

https://www.mashvisor.com/blog/how-to-invest-in-real-estatewith-no-money-beginners-guide/ https://en.wikipedia.org/wiki/Real_estate_investing https://www.auction.com/blog/what-is-house-hacking/ https://www.mashvisor.com/cities/ca/irvine-investmentproperty-guide

2021