Real estate can be a great way to produce passive income, but it often requires upfront investment. However, there are options for getting started in real estate without needing to put your own capital at risk. With some creativity and hustle, you can get involved in real estate deals and start earning without spending much or any of your own money.
Wholesaling
Wholesaling involves putting sellers and buyers together in order to facilitate real estate transactions. You find a motivated seller, put their property under contract for a wholesale price (e.g. $100,000), then find a buyer at a slightly higher price (e.g. $110,000) for a quick flip without owning the property. Your profit is the difference between the two prices.
Bird Dogging
Bird dogging is similar to wholesaling but you let other investors do the actual deals while you collect a finder's fee. Identify promising investment properties, conduct initial due diligence, then connect them with real estate investors for a referral fee (e.g. 5% of purchase price).
Rent-To-Own Agreements
Help sellers sell their home through a rent-to-own agreement where the buyer rents for a period before finalizing the purchase. Collect fees for arranging and managing the agreements. E.g. collect $50/month from buyer as a management fee.
REIT Investing
You can invest in large-scale real estate projects by purchasing shares in Real Estate Investment Trusts (REITs) which trade on public markets like stocks. This allows real estate investment through the stock market with as little as $1,000.
Hard Money Lending
Hard money loans serve real estate investors and developers through providing quick short-term financing at higher interest rates. You can fund these loans with capital from other private lenders. Earn origination fees (e.g. 2% of the loan amount) and interest payments (e.g. 12% APR).
Building expertise in your local real estate market is crucial. With ingenuity and persistence, you can get your start in real estate investing without needing large capital yourself. Prove yourself on smaller deals and your access to bigger opportunities will grow.