Many people believe that you can only get started in the real estate investment business when you have “a few million left.” This concept is not entirely wrong, since it is common for people who invest in this market to do so because they already have money for this. But this should not be a concern for people who do not have much to put first. For you we have the next suggestions so you can begin investing in real estate with little money …
Strategies for Investing in Real Estate with Little $$$
- House Hack – This strategy consists of you buying a duplex house with 4-5 rooms in total. So that you and your family can live in one house, and rent the house next door. The idea is that with the amount of the rent you can cover the monthly payment of the loan. Along with the maintenance costs of the property. So the money that you would normally invest in accommodation can now be redirected to saving in order to invest more.
- Live-In Flip – You buy a property that needs to be remodeled. But instead of quickly renovating and re-selling it: you are going to live in it and renew it little by little. If it is habitable then you can go live in it at once. But if not then first make it habitable and then inhabit it with your family. After one or two years of living in it and renovating it, you can re-sell it. Then use that money that has now multiplied to invest again in something that generates quickly.
- Get a Loan – Currently there are many ways apart from the traditional way of going to the bank to ask for a loan. If you want you can supplement the money you have saved with a loan from a bank. Or from a place of credit, or even a family member or friend,and then you can use this for investing in real estate.
- Get a Partner – Related to the previous point, another way instead of borrowing money may be that you get a partner who has better capital to invest. In this way you will not be paying back under an interest rate but you can reach a good deal to divide the profits by percentage.
- Wholesaling – This concept starts from the fact that you buy a property with great potential at a reduced price, and then re-sell it to someone who can develop it for a price a little higher than the one who bought it. For example: you buy a lot that was originally $80K at $50,000. Then you sell it to an investor for $65,000. This person wins having bought a good lot at a reduced price, and you take a commission / profit of $15K.
It is a good time to seek to negotiate with the owners, the pandemic marked a before and after and now there is more space for dialogue, you can take advantage of so many purchases at prices up to 30 to 40% below the market level that they come out very comfortable and they can be of interest to sellers if they have urgent financial situations. It is a matter of looking for the best deals and the right time to negotiate
Mario Barrantes – Nativu Escazú & Santa Ana
If you’ve read these options and still decided that it might be better to wait until you have more money, then your best option is to save. Part of our NATIVU manifesto says “Be orderly with your money, it will allow you to lead a calm life.” So if these options sound appealing to you then congratulations and good luck in this adventure of investing in real estate!
