Bigger Pockets: How to Start a Real Estate Portfolio with Just $10K
For most Americans, the biggest source of wealth in their lifetime comes from the equity built up in their home. And for many wealthy investors, no matter where they build their wealth, much of it tends to end up in real estate.
However, there tend to be sizeable barriers to entry. It takes a considerable amount of money to make a down payment on a property. Fortunately, that doesn’t need to be an impediment to get started investing in real estate.
Conventional real estate investing involves putting down 20 percent of the purchase price. With the average home valued over $350,000, investors would need nearly $70,000 to get started.
However, there are ways to get started with far less, even no money down. But an investor with some cash at the table, even $10,000 has a surprising number of options.
One strategy is to bring in a partner. While a partner may bring in most of the money for a deal, and will also get a substantial amount of the value of the property, it can be a simple way to get started. And the profits from a partnership deal can be rolled into a new deal in time.
Another strategy is house hacking. It involves buying a home, then renting out individual rooms, a guest house or the like. This strategy can be used with first-time homebuyers, which typically require less money down.