How to Invest in Real Estate with Limited Resources

If you’re entrepreneurial but don’t like the idea of creating a business from scratch, real estate investing might be the best solution for you.

But when you’re starting out, you probably won’t be lucky enough to have an abundance of resources to get you going. If you’re wondering whether you can invest in real estate even with limited resources, the answer is yes—but you’ll need to go about it strategically to make the most of what you do have.

Here, we’re explaining how you can invest in real estate when your resources are limited.

Start Small with a Fixer-Upper

The good news is that you don’t need a big budget to get started in real estate. Set your sights on a smaller, undervalued property, which will serve as a good entry point into investing.

Houses that need work sell for less, and (providing you’re willing to put in the work to do it up), you can increase a property’s value without having to spend a fortune. You can make a big difference to the appearance of a property by making smaller cosmetic upgrades, like painting the walls a fresh color, updating the flooring, and changing or painting the cabinets on the kitchen units.

Use Hard Money Loans for Fast Access to Financing

Traditional lenders will expect you to have high credit scores, a steady income, and a big down payment—three things that you probably don’t have all at once as a new investor—to secure a loan.

A good alternative to traditional financing is hard money. Hard money lenders give you access to short-term funding based on the property’s value, rather than focusing on your financial history.

Yes, they do have higher interest rates, which is something to be aware of when your budget is tight. But, importantly, they let you act fast on investment opportunities, making them a good choice for fix and flip deals (which you’re most likely to take advantage of as a beginner investor).

Partner with Other Investors

If you don’t have the capital to buy a property on your own, it’s well worth considering teaming up with another investor. When you partner with other people, you’ll be able to split costs and take on bigger deals than you could on your own. Plus, you can choose your strong points—for example, your partner could handle the financing, while you do all the renovations and manage the property once you’ve rented it out.

It goes without saying that you should only enter a partnership after establishing a clear agreement on your responsibilities and profit-sharing, so you can avoid conflicts down the line.

Takeaway

It takes a lot of time to build a real estate portfolio, especially when you’re starting with limited resources. But don’t let that put you off.

There’s no set timeline that you should follow to be a “successful” real estate investor”. So, rather than trying to become as rich as possible ASAP from your efforts, focus on making smart investments that will appreciate in value over time.