Is Real Estate A Get Rich Quick Investment

Certainly, there are a lot of books out there, a lot of articles, a lot of people suggesting that real estate investing could be a get-rich-quick scheme. Nothing could be further from the truth.

Real estate is not a get-rich-quick scheme. It’s not something you can do quickly and make a lot of money out of it. There certainly are ways to invest or to get involved in real estate where you can make a lot of money. Things like wholesaling, for example.

Wholesaling

You don’t need any money to get started with wholesaling. All you have to do is you have to have a lot of tenacity, a lot of persistence. You go out, you find properties that are undervalued from motivated sellers.

Then you go out and you find buyers, people that are interested in purchasing properties that needed some fixing. They purchase the properties from you. So basically, your wholesaling. You found the properties from the motivated seller, and now you’re selling it to somebody that’s going to fix them up and sell them to a retail buyer.

So that’s wholesaling. Wholesaling’s quite easy to get started with.

Lease Options

Another way you can get started without any money is lease options. And this seems to be the confusion … get rich quick versus nothing down. Certainly, there are several ways to get started in real estate with nothing down. The first one I just mentioned is wholesaling. The other one out there is lease options.

The biggest lease option strategy is what is called sandwich lease options. You go out, you find a property. You put it under lease with the owner of the property, and then you sublease it to somebody else. And the reason it’s called a lease option is that the person you are leasing to also has the option to buy it from you. So that’s a lease with an option to purchase it.

You just need a willing person, a person that’s willing to lease it to you, and a willing buyer, meaning a tenant-buyer, somebody that’s willing to lease it from you over a period of time and then eventually purchase it.

Those are the two ways to get started fairly easy with real estate where you can make some money fairly quickly without needing any money.

After you start getting money from those strategies, then you can get involved in actual investment opportunities, where you can go out and you purchase properties.

Buy Rent and Hold

You can go out and buy properties like rental properties, whether it’s single-family homes, or multifamily homes, or even apartment buildings. And yes, you can purchase apartment buildings when you just get started. You just need to know how to do that. But the nice thing about these investments is there’s not a lot of work involved like the other two … lease options and wholesaling … where there is a fair bit of work required. It’s almost like a job.

With rental properties, you buy them, you rent them out, and then hopefully you can sit back and collect rents which also is a fallacy because you’re assuming that the rents that you’re going to get will cover all your expenses. You’re assuming that you never have to do any maintenance. There’s a lot of bad information out there about how you can get rich with residential real estate which is a long-term strategy.

Fix and Flips

Another strategy that requires a lot of effort and the other one that’s popular is fix and flips.

You see a lot of these shows where people go out and they acquire these properties, and then they get them for a steal and then they fix them up and they sell them for a hefty profit.

Now, the challenge with fix and flips is you never know what you’re buying. You never know what you’re getting into. Chances are you’re going to get a property that may be okay, meaning that the estimates for the renovations that you originally estimated are going to come in close to what you estimated, which is good. This rarely happens.

Conslcusioin

So all these investment strategies I’m talking about require a little bit of experience and require a little bit of knowledge. Sure, you may be lucky at first. You may be one of the few that does end up making money from their first deal, their second deal, their third deal, but what’s probably going to happen is you’re going to lose on your first one or two deals, especially in fix and flips.

Rentals are a little bit easier because it’s hard for you to lose money in rentals, but it’s also hard for you to make a lot of money in rentals in the short term. Rentals take a long time to make money. Therefore I suggest people get involved in either syndication with private equity where you raise money and find properties, larger properties that will appreciate with the increased rents.