How can I get started in real estate with only $5,000?
Hands down, the biggest challenge facing 99 percent of aspiring real estate investors is limited capital. Even when they do have some savings or investment capital, they are often cautious about putting it all in to a single property, at least until they better know the ropes. Yet everyone has to start somewhere. So “no money down” promises aside, what options are there?
5 Ways to Start Investing in Real Estate With Just $5,000
1. Wholesaling Houses
Wholesaling houses is commonly promoted as the way to get into real estate with no cash, no credit, and no experience. It’s possible. It can even be incredibly profitable. This can refer to both flipping real estate contracts and wholesaling houses with rapid closings using transactional funding. In reality, there are costs. They may be small, but they are there. There are educational costs, operational costs of just being out there doing business, earnest money deposits, and drumming up a buyers list. This can be achieved with $5,000 or less out of pocket, but it does require a hungry hustler who isn’t afraid to get out there on the frontline and put in the time.
2. Lease Options
Lease options can be an appealing choice for those who don’t have the credit to go get a mortgage loan from the bank. It offers the ability to control property with little upfront money and the choice to purchase it later at a predetermined price. The downside can be having to carry holding costs each month and putting up “option money” for the privilege of the choice to buy later.
If you don’t buy, that money is lost. It is also essential to conduct deep due diligence on the seller-landlord to ensure they have the ability to live up to their end of the bargain. On a low end property, one of these options is completely possible with $5,000 or less. However, if you don’t have a tenant to occupy the property, you…