How do many wealthy people get that way? They invest in real estate. It is a proven way to build wealth. 90% of millionaires became so through owning real estate.
So said famous industrialist (and billionaire) Andrew Carnegie. Yet only 15% of Americans invest in real estate, according to a 2017 study.
When most people think of investing in real estate, they think of the mom-and-pop investor who owns several rental houses and spends their evenings and weekends fixing them up and dealing with tenant issues.
While this is certainly a viable and profitable strategy, there are many other avenues to invest in real estate. One of the biggest hang-ups people encounter when considering investing is the process of buying a property – they don’t have enough money, or there’s too much risk, or they don’t know what they’re doing.
To those people, I say – change the definition! There are many ways to invest in real estate without buying a property at all.
A Real Estate Investment Trust (or REIT) is a company that owns and operates real estate. You can buy shares in a REIT and own a small part of the company that owns the real estate.
The JOBS Act of 2012 opened the door for many small businesses (including real estate companies) to raise money through public crowdfunding.
I’ve done many different things in real estate investing, but one of my favorites is being a hard money lender. If you have the cash, you can “become the bank” and lend money to house flippers or landlords who need to do serious work to a property before they can get a typical bank loan.