This article is aimed at a very specific audience of people who want to invest in real estate with little money, specifically homes, without much knowledge or great economic possibilities.
We decided to write this post after realizing that there is a wide sector of people who are included in this profile: people with an interest in making money and creating assets through real estate, but who, however, have never done so mainly because they do not have much money. What can be done in such a situation?
Over-indebtedness refers to the financial circumstances in which the individual is unable to meet the payments of a debt. The reasons are diverse, it can be the sudden lack of employment, reduction of monthly income, to commit to the payment of a debt that goes beyond our total income. Investing in buildings that exceed your budget could also be a cause.
That is why we provide you with a guide on how to invest in real estate with little money without having to run the risk of over-indebtedness.
First and foremost I congratulate you because despite the inconveniences, despite not having everything in your favor, you want to do, you want to start, you want to transform your reality and that of other people in the world of money, investments, and real estate.
Therefore, congratulations, you have already started, you have already put your intention and your focus in a specific place and you are heading towards it.
If you are wondering how to invest in real estate with little money, without suffering an economic collapse that completely destabilizes you, here are the best tips for investing in real estate.
How To Invest In Real Estate With Little Money
Here are some questions that may be running through your mind right now and we have a direct answer to each one of your questions.
Should I wait until I have all the money to invest in real estate?
Answer: No, the truth.
Why wait until you can start now? Also, do you know the future? Are you sure that you will have all the money you need one day? Are you sure that, having it, you will not spend it on something else or will direct your focus to other types of investments? Are you sure that you will not die sooner? Do you know the turns that life is going to take your life?
Tip: don’t waste time and start with what you have. Results are not achieved by waiting, but by doing.
Must I have something saved?
You need to have something saved or start saving it (saving, in general, is important). Because in this article we talk about starting to invest with LITTLE money, not NO MONEY, which means that you have SOME money.
If you have nothing at all, that is, if you are bare like a rat’s tail, if you have zero potatoes, I think that a good sign of humility and common sense would be to ask yourself beforehand what happens with your life.
Investments will come later, they are not a priority, and it is more important to live than to invest. It would be good to ask yourself and reflect on why you have absolutely nothing, why you cannot save, why you are not saving, why perhaps you do not even have an income, because you limit yourself to surviving by spending everything you earn on matters of mere survival.
If one as of today, had absolutely nothing, I would ask myself these vital questions beforehand and very seriously.
Where do I get the money I need to invest in property?
We have 3 possibilities, and obviously, none is perfect because the perfect thing would be to have all the capital, but if you don’t have it, another good sign of humility and common sense is to recognize reality and act on it. Let’s not complain and continue.
1st. Real Estate Crowdfunding
If you do not have large sums and you do not want to dedicate yourself to looking for / collecting what you lack, a good option is Real Estate Crowdfunding.
Through this strategy, a plurality of people contribute capital (from generally low amounts) to a common fund for the purchase of the real estate, which is acquired with the joint capital of all, and from there the returns are distributed proportionally.
The returns are lower than in the case of doing it alone, but you save having to Work the investment because they give you everything done.
2nd. Find Your Partners
Another possibility is to find partners/friends/travel companions who are in the same situation as you. If the property is worth 60 and you have 20, find two more who have another 20 and you get together.
You jointly acquire the property and each of you will be a pro-undivided owner of a proportional part, depending on the capital contributed.
We at EucarlRealty are not a supporter of debt but of freedom, though there are expectations.
You can go Into debt if all these requirements are met:
- You have a stable monthly income with signs of continuity.
- The amount of the same allows you to live quietly and dedicate a part to the investment.
- You do not compromise the assets of other people (your parents do not endorse you, for example).
- The destination of money is a good one that will produce more money, a goose that lays golden eggs, an asset. That’s the good debt that the author of Rich Dad Poor Dad was talking about.
If the above requirements are met in your person, you can get into debt. It is a form of leverage that, at least in the beginning, you may need.
The traditional way to do it would be banking, but you can also resort to alternative forms of financing such as crowdlending (which in addition to being an investment strategy is a way to obtain capital).
How to invest in real estate when we already have the money?
Even when you have all the money, you still need the necessary knowledge so as not to be wrong. You will never have complete knowledge of anything and you will never have the guarantee of not being wrong. These are the steps you should take when you are not very expert in the field even when you have the money.
#1. Register in the main real estate platforms
In most cases, with an e-mail, password, and little requested information you can get started.
#2. Make a selection of properties of your choice
This is important. Each person will search for a specific type of property based on a series of parameters:
- The money you have i.e. your initial budget.
- The neighborhoods of the city you want to focus on.
- The type of investment you want to make (rental, subsequent sale..)
- Your personal tastes, although they should NOT influence much (if you are more of a flat or house, country or city).
Then, depending on your personal situation, set your filters in the alerts and start receiving ads for the properties that meet your needs.
#3. Call the attached phone numbers for your property of interest
The call is to expand the data and confirm that those published properties are correct. It is preferable to call by phone than to write.
Emails sometimes become an endless series of comments, questions, and answers..,.a kind of endless chat at the end of which the apartment will have already been sold if it is a good opportunity.
#4. Make arrangements to visit the property
After you have seen the property of your choice and have called the displayed phone number, you need to arrange a suitable time to visit the property and inspect it to see if truly it meets up to what you really want.
From the list of chosen, start with the first and, if necessary, continue with the following, making counter-offers to the downside.
The owner who accepts it or comes closest, respecting the order of priority, is the one chosen to.. sell you his home!
Mission accomplished: you already have a property purchased.
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