7 ways to invest in Real Estate without the hassle of management!
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1. Use a self directed IRA. Self directed IRA’s are a great way to earn money in real estate without the hassle of management. Very few investment advisors know about them or know that you can use them to invest in real estate. You can use them on deals that you are funding as a private investor. Although the interest checks and profit need to be paid directly to the IRA, it is an excellent way to avoid taxes. Also other standard IRA rules apply (ie can’t start to receive payments until age 65, etc…) The best company to use is equity trust company, located in Ohio.
2. Partner with large apartment building buyers. Let them do all the hard work, and you take the back seat by funding the deal. Make sure to pick very experienced and highly skilled operators (like myself), as experience is the #1 factor that will determine likelihood of success. Make sure to do your homework on the neighborhood and make sure to NEVER buy in war zones. To insure the building can be sold at a later date this is critical. It will also make the management easier and overall likelihood of success much better. A thorough review of the operating costs by an experienced manager is critical as well. Savvy real estate investors all grow to this stage.
3. Attend your local REIA often. To find real estate investors and investing groups looking for partners to fund their deals attend your local real estate investors association often. You will find potentially great deals and potential partners that need private investors to fund their deals. They are used to dealing with hard money lenders and will be vying for your business and the opportunity to do a deal with you. I have been an active member of Cincinnati REIA since 1998.
4. Buy notes. By purchasing non-performing notes at a huge discount you can do extremely well in the current economic condition. Many lenders are willing to take 25-40% of what’s owed to them and move on. Make sure to research the specific notes and properties your buying first to insure you can work out a deal with the home owner that is in the property or easily sell the property once you take procession. Also research the challenges of note buying to insure you fully understand them.
5. Wholesale houses. By finding great deals and wholesaling your interest in the property to a cash buyer you can make a quick $5-$10,000 each time. There is no management or long term holding nightmares at all in wholesaling. Your job becomes how to creatively locate motivated sellers that have houses that are NOT listed on the MLS. There are 1,000 ways to do this. Wholesaling houses requires no credit, no money, and little experience. There are a ton of great real estate investing courses out there to help you learn more. Follow my blog for more info on this subject.
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