There is no such thing as a lack of initial money in real estate because the money has to come from some source. If you want to invest in real estate with little or no money, you need to develop the ability to recognize, understand, and even leverage other people's money. You can also gain exposure to a more diversified selection of real estate investments by buying from a fund that has stakes in many REITs. You can do this through an ETF or by investing in an investment fund that holds shares in several REITs.
The rapid buying, remodeling and selling of residential properties is a popular TV show format, and many people, especially those who like practical projects, might find this type of real estate investment incredibly attractive. If you have a little more money to invest in real estate, using conservative leverage is the perfect way to use a small down payment to directly own and control a rental property to generate a steady net cash flow for you, while using the tenant's rent to pay all your bills and still make a profit for yourself. REITs are publicly traded companies on major stock exchanges that invest in revenue-generating real estate, including residential rental properties, commercial properties, and health care properties. Like all investment decisions, the best real estate investments are the ones that best serve you, the investor.
However, another benefit of using conservative leverage is that you can diversify your investment portfolio by buying several properties instead of just one. For people who can afford the down payment, it's not unreasonable to consider rental properties as a worthwhile investment. Generally speaking, the higher the return on cash on cash, the more profitable the investment will be, since it receives more net cash flow compared to the amount of cash invested. If you don't have DIY skills, consider investing in real estate through a REIT or crowdfunding platform rather than directly in a property.
A third way to make money investing in real estate without money or credit is to “Opt for a property. This is where you lease a property to a seller for a fixed amount of money each month, with the exclusive right to purchase the property within a specified time frame. Another option is to invest in a fund, such as CrowdStreet's Blended Portfolio, a diversified fund built with several properties selected algorithmically to hedge risk. Investing in residential real estate can be extremely practical, especially if you are interested in investing in repair properties.
