What Are the Best Types of Real Estate Investments?

I get a lot of emails from people asking how to get started as a real estate investor. They want to make money in the business, and know it is an awesome business, but they aren’t sure how to begin. The first step is to figure out what kind of investor you want to be. Do you want to flip houses, buy rentals, or buy wholesale properties? It might even be best to start out as a real estate agent and hold off on the investing part until you have an established career.

Starting anything new can be scary and overwhelming, but we all have to start somewhere. Obviously educating yourself is the first step to becoming successful in real estate, but you must also take action as soon as possible. Making mistakes is the best way to learn, and you should not be afraid to make a few! The most successful agents on my team start selling houses as soon as possible; they did not wait until they knew everything. Some of the most successful flippers on my podcast lost money on their first deals yet rebounded and now make millions.

You may not make the perfect investment the first time you try, but that does not mean it will not be a good investment and great learning experience along the way. You will also be more successful if you do not try to do 10 things at once. Most people who want to be a wholesaler, agent, flipper, or landlord, all in the beginning, are not successful. Choose one thing to focus on and, you will have a much better chance to succeed. To help people figure out what they should do, what path to take, and how to take action, I created a real estate investing program: Real Estate Investor Jump-Start Course.

What are the different kinds of real estate investing?

The first thing you need to decide is what type of investor you want to be. Do you want to be a wholesaler, a landlord, a flipper, or something else? Each aspect has its pros and cons, as well as different amounts of money needed to start. Here is a basic breakdown of each of the main type of real estate investments:

  • Wholesaling: A wholesaler gets a house under contract and uses a double close or an assignment to sell the house to another investor. The wholesaler usually uses direct marketing to get great deals. You can read much more about wholesaling here.
  • Rental Properties: The idea behind making money with rentals is very simple: buy a house and rent it out. However, there are many ways to make rentals an awesome investment by purchasing at below-market value, calculating cash flow correctly, refinancing, and much more. You can read more about rental properties here.
  • Flipping houses: House flipping is also a very simple concept: buy a house, fix it up, and sell it to make a profit. However, finding deals, financing flips, finding contractors, and managing expenses is not easy with flips. It also takes quite a bit of money to flip houses. You can read more about flipping here.
  • Real estate agent: Some people may not want to start out as investors. They may want to build their career first. Being a real estate agent is a great career, but it takes time and money to be successful as well. One nice thing about being an agent is it makes investing much easier. You can find out more about being a real estate agent here.
  • Other options: You can also invest in notes, mobile home parks, commercial real estate such as retail space and office buildings. Those investments tend to be for more experienced investors, and I will not focus on them.

Do you want to be a full-time or part-time real estate investor?

Something else you need to consider is how much time you have to devote to the business. What path you take will depend on how much time you have. If you only have a couple of hours a week, your options will be limited. You might be able to build some passive income with rental properties, but it will be tough to build a wholesaling business or to flip houses. Once you have your business up and running, it may not take a ton of time, but it will take a lot of time getting the business started. The more time you can devote to the business, the better your results.

If you want to be a full-time real estate investor or eventually become a full-time investor, you have more options. I work with quite a few people who have full-time jobs and are investing in flips and rentals. Their biggest challenge is finding the time it takes to get deals and mange the repair process. They want to go full-time into real estate investing and know it takes sacrifice in the beginning to make it work.

Investing in turn-key rentals is one way to reduce the time it takes to invest in real estate.

How much money do you need to invest in real estate?

Another consideration when deciding what type of investor to be is how much money you will need to start. Flipping houses and buying rentals can take a lot of cash. There are ways to buy with less money down, but it will take work and sacrifice to make it happen. Hard money lenders can allow you to buy properties with less money, but you will still need some cash. Buying as an owner occupant is another way to reduce the money you need to get started, but it will take time for the process to work. If you have access to private money or partners, you can start with much less money down.

If you don’t have access to private money or partners, you may want to focus on your career or some other type of real estate business. You can get started with less money as an agent or wholesaler. However, you will still need some money. Real estate agent classes, licensing, and MLS access all cost money. When you are wholesaling, it costs money to market to sellers and find buyers. How much money you need will depend on where you are located and how resourceful you are.

How do you make yourself take action as a real estate investor?

Many potential investors have problems getting started. Some people want to be real estate investors but never invest in a property. Building your business is difficult and takes time. I did not get to a point where I could flip 15 to 20 houses at once overnight. Many people get stuck reading and watching videos about how to invest instead of taking action. You do not have to buy a house to take action; sometimes all it takes is doing something simple like looking at houses. Talking to a lender could be a great first step that many people never take. The sooner you start taking action, the sooner you will become successful. Even if you do not know exactly how you are going to invest or where you are going to get the money, you can get started. Analysis paralysis stops many investors from ever closing a deal. Even if you do a bad deal or do not make as much money as you thought, you will be better off than not doing a deal. Many of the most successful real estate investors did not start out with awesome deals. They simply started and learned as they went.

How can you be a successful real estate investor?

I think reading articles like this one is a great start to becoming a real estate investor. There are also a ton of free resources online. I have over 450 articles on my site, as well as podcasts and YouTube videos. I think too much information can be overwhelming, because you do not know who to believe or where to start. The is why I created a video series to help investors jump start their career. It gets straight to the point and includes videos and resources to help you figure out:

  • The best investment for you.
  • How much money you need.
  • How to get financing.
  • How to take action right away.
  • How to plan it all out.
  • How to focus on what will make you successful.

The best part about the program is I made it as affordable as possible (under $50). In fact, you can use coupon code jumpstart50 to take 50 percent off of the program today. You can get instant access to the program by clicking on the link below:

Real Estate Investor Jump-Start Course