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Investing in real estate can be intimidating, especially if you don’t have the money. If you’re ready to buy some property, but don’t have the cash at hand, continue reading to find out 10 ways that you can start investing in real estate right now.
1. Real Estate Investment Trust
REIT companies own or finance income-producing real estate across various property sectors. REITs are similar to mutual funds, offering everyday real estate investors the opportunity to realize dividend-based income and returns. You can invest in a real estate portfolio by purchasing individual company stock through an exchange-traded fund or mutual fund.
As a REIT stockholder, you earn a share of the produced income without directly buying, financing or managing the property. If you choose to invest in real estate with a REIT, you are in good company, as nearly 145 million Americans who own homes invested in REITs through their retirement plans, such as IRAs and 401(k)s, and other investment funds.
2. Hard Money Loan
Hard money loans are also called bridge loans, short-term asset-backed bridge loans, also known as STABBL, and asset-based loans. They are used for short-term financing of mortgage loans. You can’t get a hard money loan from a bank or credit union. Only private and individual lenders offer real estate hard money loans.
Securing a hard money loan is often an easier and quicker way to invest in real estate than going through the traditional institution financing and approval process. Plus, your credit history is not an issue because hard money loans are asset-based.
Investors who use hard money loans to purchase real estate are typically house flippers, people who renovate and sell properties for profit.
3. Government Loans
The U.S. government offers loan programs for real estate investing. Here’s a couple to consider.
- Department of Veterans Affairs (VA) Home Loan Program guarantees loans to eligible veterans, service members, reservists, National Guard members and certain surviving veteran spouses. This loan usually requires $0 down payment and favorable interest rates.
- Rural Housing Loan Program offers direct and guaranteed loans to buy, build and improve a permanent residence. You can finance a new manufactured home if it’s on a permanent site and was purchased from a government-approved contractor or dealer. The property must be in a rural area, and you must qualify as a low-income earner.
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