The Lots of Money / Little Time / Hands-off Investor

If you’re someone who fits predominantly into this category, it’s likely you’ve been saving a while or investing in the stock market since the day you received your first paycheck. It’s also possible that the tax breaks, passive income, and potential positive impact your real estate investments can make on a community are attracting your attention.

However, you’re a very busy individual – maybe with a family or in the prime of your career or both! You haven’t got the time to research neighborhoods and markets or tour properties, much less to actively renovate or manage a property.

–> Recommendation: Become a Passive Investor

For investors with the money to invest but not enough time on their hands to manage the property and get the maximum returns, passive real estate investments are the ticket. You can invest passively through turnkey rental properties or commercial real estate syndications.

Turnkey Rental Properties

Turnkey rental properties are smaller scale and as simple as they sound. You purchase a to-be rental property, ready to go, with minimal involvement or work needed. It’s even possible to hire a small scale property manager and you can enjoy some cash flow, albeit usually small, very quickly.

Commercial Real Estate Syndications

Another opportunity lies in group investments where money is pooled together to buy a large piece of commercial real estate property – a.k.a. a syndication.

Syndicators do all heavy lifting from the research and analyzing markets to meeting brokers, hiring contractors, overseeing the business plan, communications and much more. They find commercial real estate properties they think would be an awesome investment and then orchestrate the deal, the renovations, operations of the property, and usually a few years down the road, the sale of the property.

This is where investors like you come in. You rely on the syndicators’ time, expertise, and partnership team. Meanwhile, your money is invested, and every quarter you receive a distribution check – your portion of the returns earned on the asset. Plus, when the property sells after the hold period, you receive a part of the sale’s profits.

Overview of These Types of Real Estate Investments

What you put in
Investment dollars

What you leverage
Other people’s time and expertise

What you get
Ongoing passive income, confidence knowing your money is being put to good use by an experienced team, tremendous tax advantages and an equity stake in real estate.

The Little Money / Little Time / Hands-off Investor

In contrast, if you don’t have a large pool of money or time to spend investing in real estate (yet!), but are attracted to real estate as a way to build such wealth, there are options for you too!

One of the best ways to get started investing in real estate with little capital is using crowdfunding sites.  Another clever way is to find some friends or family and pool your money into a larger sum in an LLC created to invest in a property.

–> Recommendation: Invest through a real estate crowdfunding site

Just as Kickstarter funds new products, there are real estate crowdfunding sites where people can pitch in low amounts of capital toward commercial real estate projects. The difference? Crowdfunded commercial real estate pays cash dividends instead of t-shirts and sneak peeks of the product’s prototype.

Real estate crowdfunding sites are open to public use, typically have low initial investment requirements, and are available to both accredited and non-accredited investors.

Overview of These Types of Real Estate Investments

What you put in
Your money (in small amounts)

What you leverage
Crowdfunding platforms, experienced deal sponsors, strength in numbers (i.e., lots of people all putting in small amounts of money)

What you get
A variety of choices on crowdfunding platforms and real estate projects, ability to invest with very little capital, various project types and project lengths to suit your investment goals

The Little Money / Lots of Time / Hands-on Investor

So, you’re interested in real estate, but cash isn’t exactly “flowing” in your life right now. That’s okay, because if you’re willing to roll up your sleeves, there are still ways you can make your first investment in real estate.

You still have something of value to bring to the table – sweat equity. This means you’re willing to spend the time and effort to find properties, devour the paperwork, rehab the property (maybe personally), and make your passion for real estate become create cash.

Your Strengths, Interests, and Goals

If the above describes you, take a moment to identify your strengths and passions. Does the thrill of hunting for deals interest you the most? Is the renovation planning and execution process exciting to you? Maybe you’re a numbers nerd and can’t wait to analyze the trends and markets of each neighborhood?

Additionally, what are you in it for? Long term equity or short-term capital?

Here are some of the most common ways you can invest in real estate with little money and lots of time.

–> Recommended Real Estate Investment Strategies

1) Fix and Flips

This is where you buy a run-down piece of property, fix it up, and then sell it for a profit – just like it sounds! Fix it.  Flip it.  If you don’t have cash for a down payment, short-term private loans might be an option. You just need a few months to a year or complete the renovations. Then when the property sells, you pay off your loans and pocket the profits.

2) The BRRRR Strategy

I hate to break it to you, but no, BRRRR doesn’t mean it’s cold in here. BRRRR stands for buy, renovate, rent, refinance, and repeat. It’s a lot like the fix and flip strategy except that you hold onto the asset for a longer term.

If you took out a private loan to cover the down payment, you pay off that loan during the refinance step of the process. If done correctly, the value of the property after renovations/repairs will be significantly higher than the purchase price. This abrupt upward appreciation will allow you to do a cash-out refinance and pay off any loans you took to buy the property.

3) Wholesaling

If you’re a good networker and are able to find “off-market” deals, you may be able to get a property under contract at a low price. Then, while under contract and before the purchase is complete, you wholesale it to another buyer at a higher price. The difference between the two purchase prices goes in your pocket.

4) House Hacking

Depending on your local market, you may be able to get your foot in the proverbial real estate door via house hacking. This is where you buy a property with 2-4 units, you live in one of them, and you rent out the other units. The rental income received from other tenants pays your mortgage. Sweet!

5) Real Estate Crowdfunding Sites

Crowdfunding sites are a great place to start learning about real estate syndications without the pressure of running one (yet!). You can learn to find and compare deals, research sponsor teams’ track records, and learn what to expect in a syndication deal as far as communication and returns for investors.

Overview of These Types of Real Estate Investments

What you put in
Your time

What you leverage
Other people’s money

What you get
Firsthand experience, potential for high returns on very little cash investment

The Lots of Money / Lots of Time / Hands-on Investor

Um, can we be best friends?

You’re in a fantastic position to make your money grow exponentially.

–> Recommendation: Lead commercial real estate syndications

If you’d like to be an active investor, leading your own syndications puts you in the driver’s seat. You get to find the deals, assemble the team, raise the capital, and have a say in the day-to-day operations. The choice is yours to go it alone as the syndication lead or to partner with others and create a syndication business.

–> Recommendation: Become a passive investor in commercial real estate syndications

You also have the option to be a passive investor who’s extremely active in finding and vetting deals for real estate syndicators or private equity firms.

Savvy passive investors know the lingo and have some basics down about deal structures and underwriting. Any investment can look great in a fancy marketing packet, but only savvy investors will know the right questions to ask and be able to reveal details about the deal and the team.

Overview of These Types of Real Estate Investments

What you put in
Your money and your time

What you leverage
The power of others’ expertise, time, and money to help you go bigger, faster

What you get
The freedom to carve your own path and maximize how hard your money is working for you

Summary

This article just threw a ton of information at you, and even though it was separated into categories, an overview might do you some good.

Before reading this, we hope you took some time to identify your investing goals, your current life stage, your risk tolerance, and your investing goals, as outlined in The Beginner’s Guide to Investing In Real Estate: How to Get Started.

From there, it’s likely you fell into one of four categories. Within each group, beginner investors have multiple opportunities to get started on their real estate investment journey. Our suggestions for real estate investment opportunities per investor-type are as follows:

The Lots of Money / Little Time / Hands-off Investor

Consider investing passively in commercial real estate syndications

The Little Money / Little Time / Hands-off Investor

Consider investing small amounts through real estate crowdfunding sites

The Little Money / Lots of Time / Hands-on Investor

Lots of options: Fix and flip, BRRRR method, wholesaling, house hacking, crowdfunding, and more

The Lots of money / Lots of time / Hands-on Investor

Active: Consider leading your own commercial real estate syndication

Passive: Invest through real estate crowdfunding sites or directly through syndicators and private equity firms

Conclusion

All in all, there are real estate investment opportunities for every type of investor, at every stage of life, with any range of available capital and time freedom. Once you’re able to identify which investor type you are at this time in your life, you can see the opportunities within that category and how they make sense for you.

One common misconception is that you need a decent amount of capital saved up in order to get started investing in real estate. The options presented above, coupled with The Little Money investor type, debunked that myth!

Now, I encourage you, don’t wait a minute longer. Get started toward becoming a real estate investor by taking action on one of the passive or active investment opportunities described above, according to the category in which you best fit.

We look forward to chatting with you in the near future about our syndication opportunities. It’s a fabulous way to create Passive Income…for life!

In addition to the ideas just presented, you can amplify your journey with the following resources: 

• EXPLORE more about the power of passive real estate investments in our section of other blogs and videos.
• SIGN UP for our newsletter for passive income-related content delivered right to your inbox
• JOIN our Passive Income Investors Group to gain access to multifamily investment opportunities and more behind the scenes content