Want to know how to make money in real estate? I asked this question once and my mentor said “you just need to get a real estate license!” Hahahaha!!
Man, I’m so glad I did. As a father and a musician, it’s totally changed my outlook in life. But here’s the thing, to get started making money in real estate, you DON’T need a license! I’m going to go over a couple ways you can make money in real estate RIGHT NOW.
There are two specific types of income in real estate that you can make without having a license. Yes, just two.
It’s either quick profits, or passive income.
The first we should talk about is passive income. We’ve all heard of passive income. Imagine yourself poolside looking at your bank account on your brand new iPhone. Your money is floating in as fast and smooth as you are down your lazy river in your infinity pool in Malibu. The elusive investor-only-lifestyle way of making money… “lifestyles of the rich and famous”… which secretly is not far from your reach.
In real estate, one way passive income is made is through rental properties- both long term and short term. A long term rental is on a one year or more lease – think an apartment or house that you live in. And short term – think Airbnb or VRBO that you vacation in. It can be as short as a few days, or as long as a few months up to a year.
I’ve asked some of my trusted advisors, and the most common response for how a person gets their first rental property, is to buy a house that they then turn around and rent. It’s not sexy. It can take time. But I’ll tell you what, you’ll know after living in your own home for a year or two whether you want to manage someone else’s. That’s the best kind of experience you can get. First hand knowledge that can aid in your decision to proceed.
Now, there are a couple of interesting ways you can leverage this property that you own. You can use equity from one house to buy another. Maybe you only want to rent a house for a few years to limit how long you have to manage the property. In Nashville, property grows in value every year, so it would be easy to just put it on the market and sell whenever you’re done with it. You can also rent properties with lease options, which will give you a tailor-made exit plan and make you the money you need on it. Seller financing offers you leverage too. That would put the house in the buyer’s name, and they’ll pay you based on a note, or mortgage, that both parties sign. This would allow you to make money for whatever term you set, and will give you interest as well.
The second method for making money in real estate without a license is quick cash. Money money, dollar bills ya’ll!
Now, full disclosure, quick profits can be risky and will require some business savvy. So please know: you’re going to want experience in real estate deals, or running your own business, and/or doing business negotiating. And I mean like selling a company. You need to have experience managing and dealing with assets.
That said, you’ll want to know what these are so you can take advantage of these types of opportunities after you have said experience under your belt.
One way to make quick money in real estate is wholesaling. Now look, there are some shady characters in that world – and wholesaling can get a bad rap because of that, but it is a good way to make some money in real estate.
It’s simply the practice of finding a distressed homeowner, someone a month or two behind on their mortgage, offering them a price for their house enough to cover their mortgage, but allowing room for some profits for you, and getting them under a contract that is assignable. Then you simply go sell that contract to someone else. An investor.
There are some holes in this information don’t you think? How do you know what to offer? Or find a fair market value if you’re not sure how to properly price a house based on improvements or a lack thereof? Where do you get a bulletproof contract? This is where the experience comes in – and some serious networking. But that’s the basic deal.
How else can you make quick cash money in real estate? HGTV-style “flipping” – we all know what that is. Whether by offering money or sweat equity to bring the deal together, it’s a good quick way to make some good money. But again can be a little risky especially until you’ve done a few.