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How to Invest in Real Estate: 7 Ways to Make Money

My family emigrated from Hong Kong. It was shortly after World War 2. My grandparents emigrated from China to Hong Kong to escape the attacks of the Japanese. Thereby, my grandparents immigrated to three countries (as Hong Kong was still part of the United Kingdom back then).

It’s quite astounding. People move for a better life. But the reasons may be different. A lot move for jobs, others for pleasure, and some for survival. 

I am incredibly fortunate that my family ended up in Canada. As a first-world country, the freedoms that I enjoyed are not available in many parts of the world. Still caught in corruption, scandals, and danger.

If you are reading this from a first-world nation too, I hope you realize after these few paragraphs how fortunate you are too. 

The odds of being born human is 1 in 400 trillion – Mel Robbins

The odds of being born in America is about 4.5% – Cheat Engine

If you are a part of that 4.5%, or you live in America, you have a lot of privileges that are not available to many others. 

One of these privileges is being able to invest in real estate. 

And to make you feel even luckier, you are living in the 21st century right now with modern technology, which gives you easy answers to questions like, “how to invest in real estate with no money” and “how to invest in real estate with little money”.

The TRADITIONAL WAY: How to Invest in Real Estate? Why to Invest In Real Estate?

My dad was born in 1956-1957. I don’t remember which year – I’m a horrible son. And my mom was born in the 60s because she’s 4 years younger than my dad.

Thank god for math!

World War 2 ended in 1945. So, it was just a little bit over a decade when mom and dad were born. Of course, both my parents lived in poverty as my grandparents had to escape China with nothing more than hand luggage to save their lives. 

They didn’t grow up with much and it’s amazing to see that over the years, everybody had owned their property.

The major indicator of success for any Asian family is homeownership.

That was the goal man. To own a f*cking house. Simple as that. 

And they achieved their goal without an education

Because my parents had to leave school early to support their families. Dad never graduated from elementary and mom only graduated from high school. 

And seeing as they did not have the Internet, it was hard to become educated on real estate investing. Their idea of investing in real estate was BUYING real estate and living in it. 

However, many of the traditional ways of making money from real estate still work today. Here are four good methods for you to take home for yourself.

1. Rent out a Room

Being raised in a low-income, one income (only my dad worked), and the immigrant household was hard. We did not have much income coming in. I feel incredibly grateful that there were no life-threatening accidents, as we did not have life insurance – if dad got injured, gravely ill, or died – we’d be out on the streets. 

Get my book Leverage and get on my email list if this is a situation you worry about and I’ll send you tips on how to protect yourself from this danger.

As I mentioned before, my parents were able to get a mortgage and put a down payment on a house that we still own. They have been there for the past 25 years. I’ve moved out since 2016. 

I still remember that we had to rent out our entire basement suite to extra income to cover the mortgage because dad was a gardener and a seasonal worker at a grocery store on minimum wage. Without saying anymore, because I’ll get emotional over it, for my parents, it was tough – they hid it well though.

So, the first way to make money when it comes to “How to Invest in Real Estate” is to simply own a home and rent out a room(s). 

The great (and illegal) thing is that if you get paid under the table (via cash), you’re not going to get taxed. You DID NOT hear that from me. Do not take that advice. 

2. Invest with Family and Friends

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Conversations with mom about our family’s real estate

Recently, I learned from mom that my dad invested in my grandma’s house (the one she lived in until her passing) with my uncle years ago. 

However, since he needed money for a down payment in the house we grew up in, he sold his shares, or a portion, to my uncle for $60,000 (Canadian Dollars). This was like 20 or so years ago when the property was around $200-300K. Now, I don’t think you can find any house in Vancouver under $1,000,000. The real estate prices are insane. That’s why I moved. I was priced out.

The second way is investing in property with family and friends. It’s the best way to not have ALL your capital tied up in the real estate. There is no interest to pay with friends and family unless you involve the bank too. However, you have to be sure that your partner is trustworthy. Make sure you have a legal contract detailed out and signed regarding the percentage of your investment, time horizons, and share of the returns. Get a lawyer to sort out all those details (I’m not a lawyer, so don’t come looking to me. Heh.)

3. Investing in Rental Properties

In our family, my uncle was the most successful child of my grandparents – well, until I came along (queue arrogance). He owns three properties. He lives in one and rents out the other two. 

This is the idea of rental properties.

Of course, if you’re looking to go hardcore on this stuff, I would recommend studying role models like Grant Cardone (real estate and sales mogul) and learn from him. I guess you can start with this vlog type video he did.

As Tony Robbins said, “Role model those people who are already where you want to be.”

Of course, you need a lot of money to be buying multiple rental properties and most people can’t do this because of lack of capital. 

You’ll most likely be leverage the bank as a business partner to get into these deals. 

Besides, you’ll probably be investing more in condo/apartment units rather than houses because, in my opinion, condos and apartment units are the future. 

Salaries just aren’t keeping up with real estate prices in any major metro city in North America at least. So, the best people can do is either get a condo or live further out in the suburbs (which is not bad for introverts, and when the zombie apocalypse happens, you’ll be able to live as a human for a little bit longer, I would think…) 

So that’s rental properties, and the great thing is, there’s always going to be demand because people need a place to live.

4. Real Estate Flipping

I’m going to be real short with this one because to be transparent, I only have one friend that does this and I’m going to describe the process as she described it to me.

Real estate flipping is buying a rundown home that needs to be renovated. Once it’s bought, you renovate it and sell it at a higher price.

It’s a great way to make money and if you are good at it, you can make it a full-time job (like my friend did with her brother). Of course, the amount of projects you can take on is limited because it requires your time. 

My friend can only take on 2 projects at one time. But she pockets $20-40K for each project.

What I don’t like about it is that you need to hire and manage different contractors for different parts of the home renovation project (i.e. foundation, electrical, etc.). It also helps to have a creative mind on how you want the result to look (which I lack).

All in all, to me, it is a lot of work that I don’t want to do. But it’s one way of making money and some people enjoy it.

The MODERN WAY: How to Invest in Real Estate? Why to Invest In Real Estate?

I’m fortunate to be born in the Internet age. It has given us so many opportunities. Imagine having to receive your emails by snail mail (i.e. sending a letter). It’ll be so inefficient!

The Internet has expanded the number of ways we can use real estate to make money. Here are a few that you might want to check out. 

5. Airbnb Rentals

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Two weeks before COVID19 made it to the USA (or was it three weeks?), Grant Cardone hosted 10X Growth Con 4 in Las Vegas, Nevada at Mandalay Bay. Seriously, it was like my second time in Vegas within a month.

That aside, you meet a variety of people at business conferences. But, the amazing thing is that ALL ARE HUNGRY to grow, be inspired, be motivated, and to MAKE MONEY

10X was my first Business Conference. I went to the once before it too, GrowthCon 3, and met some great people! 

It was really necessary as, during that time (GrowthCon 3 time), I was at the lowest point in my life after escaping death in a paragliding accident. At the same time, the girl I was “seeing” and was completely enamored with, decided to date another guy. You can read all about it if you join my newsletter at www.coursehack.club if you’re at rock bottom, and you’re open-minded, I guarantee I can help you. And it’s free! 

It was a traumatic double whammy that brought my confidence and self-worth to the lowest point.

Anyways, for GrowthCon 4, a good friend of mine was going through the same situation that I went through and I invited him to GrowthCon 4. We stayed at an Airbnb (as it was much cheaper than the hotels).

We rented out a very nice condo for the conference for four days with some friends (and strangers that became friends). It had two bedrooms with six beds. The total for those four days was $750.

If you break that down, it’s $188 per day. Split amongst six people, it’s very reasonable.

If you rent it out for 30 days (or a month), it would total $5,670. Of course, the property owner was very reasonable on price. She could have charged double if she knew about GrowthCon and people would probably have paid for it.

Airbnb rentals long term and Airbnb monthly rentals are a great source of income. You are not locked into a price as you do for a tenant. You can raise or lower prices for Airbnb rentals based on off and on-season. 

If you’re in a touristy area all year long, like Miami, you can expect to always be making money.

Give Airbnb for rentals a shot if you’re interested.

6. Reits to Invest In

Now, we’re going to talk about something that I like. Reits to invest In. 

A REIT stands for “Real Estate Investment Trust”.

If you want an in depth explanation on how to get started with this, check out this video I made (don’t forget to like and subscribe!):

My interest in real estate is pretty average. I’m interested in the money that can be made from real estate. I’m not so interested in real estate itself. You will never find me trying to be a real estate agent.

But, I did find myself asking questions about “how to invest in real estate with no money”, “how to invest in real estate with little money”, and “how to invest in real estate for beginners”

You might have the same question.

The BEST WAY to start investing in real estate is through a REIT.

That’s my opinion about it. 

For myself, I didn’t want to do the following:

  • I didn’t want to study real estate
  • I didn’t want to prospect properties and see what needs to be done.
  • I don’t want to handle any legality of buying and selling real estate.

I wanted the returns, but I didn’t want to do anything FOR IT! 

Do you feel the same?

In comes Fundrise.

Fundrise offers eReits, which are mutual funds for real estate. 

Many people pool their money together to buy real estate. Fundrise uses that pooled money to buy, manage, and sell the property. 

All the property they have, to which you have a share in, makes up their portfolios. 

The plan you choose from them to invest with consists of a portfolio that is different from all the other plans. This is how to buy real estate with no money down.

Here are the plans offered by Fundrise

These are the plans offered by Fundrise and as you can see each plan has different goals. I am invested in the Long-Term Growth plan and I put about $250 in it each month.

If you’re interested in investing with Fundrise, then you can start an account here.

7. Fundrise Review

Fundrise is pretty interesting. They are the first company to offer eReits – offers sold only by fundrise directly – that means there are no brokers involved (and thus no sales commission). 

The video I did above was pretty well-received when I released it, and it got a lot of comments. One that particularly stood out was about Fundrise’s eFunds, another one of their creations.

You can catch that video here:

To summarize, eFunds are like “stock options” that gives you the right to buy property many years down the road. I haven’t done as much research as I would like to – actually, I didn’t want to do any more research because it wasn’t an offer for me – so, do your due diligence.

It appears that if you invest a minimum with them, you will get the right to buy property in the future without bidding. So, let’s say twenty years later, you want to exercise your right to buy property from Fundrise, you will get to buy that property without bidding against competitors wanting to buy the same property.

However, that’s how I understand it. There are still some mysteries and things that need to be explained, so it’s best to contact Fundrise if you want to know more. 

I would imagine that if you wanted to sell your right to purchase property for a profit, then that is also an option. Again, please do your due diligence and make sure that’s the case. Please watch the video in its entirety to get more details (also make sure to like and subscribe). 

And again, please contact Fundrise if you want to get the whole picture because I’m pretty sure I only got a fraction of the picture. This is yet another way to answer the question of how to start investing in real estate with little money or why to invest in real estate. It’s profitable.

Keep Searching for More Ways to Invest in Real Estate

I hope you enjoyed these 7 Ways to Make Money when it comes to How to Invest in Real Estate. There are many ways to make money from real estate and the ones I listed here are just some of them.

Again, in my opinion, the best way to get started is through REITS with Fundrise. So, if you’re nervous or anxious, but want to get started, I’d start there.

Otherwise, please go get my book Leverage, which gives you other investment strategies other than Real Estate. You won’t regret it. 

All right that’s it! You learned some things. Now, go take action!

Donald

How to Invest in Real Estate References:

https://www.nerdwallet.com/blog/investing/5-ways-to-invest-in-real-estate/

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