Real Estate is such a wide and varied business area to get involved with. You don't have to be a Real Estate Agent to make all the money or to feel like a “legit investor”. You can literally specialize in a narrow niche and make millions over time or buy a few key investments that will provide great immediate cash flow and long term capital appreciation for your wealth portfolio
Here is a list of 22 Real Estate Investing Niches or Real Estate Investing Topics:
- Foreclosures, Short Sales
- Hard Money Lenders
- Landlording, Rentals
- Lease Options
- Mobile Homes & RV Parks
- Mortgages, Notes
- Private Money & Lenders
- Property Management
- Rent To Own
- Self Storage
- Tax Liens & Sales
The point is, you have the ability to learn, make investments and profit from a plethora of real estate investing areas of interest.
Here are a few examples of how to make money in the some of less then conventional profit centers listed above:
Great news is that you don’t need to own the real estate or land to get involved in this industry. If you already own real estate where billboards are allowed, this is a nice way to increase your cash flow.
Let's say you you are driving on the highway and spot a farm or vacant land off to the side that would be perfect for a billboard. Once you identify a legally permitted billboard location, you can contact the owner to enter into a ground lease with the property owner. You can offer a lease agreement where you have the right to construct a billboard in exchange for rent. Then you market and rent out your signs to advertisers for a profit.
A second method is to sub-lease an existing billboard. Do your research and find out why the sign is not rented out. It might need a simple “rehab” like removal of an obstructed view or refinishing of the frame/posts- all of which can be easily fixed. Your efforts will then create value for the advertisers and can easily be rented for a profit.
Lastly, call the number that you see on the bottom of an existing sign and make them an offer to purchase. Just be sure to perform your due diligence.
Private Money & Lenders
This area of investing is quite easy compared to all of the others. Two simple ways to use private money. You can be a borrower or a lender. And large amounts are not required for either scenario.
Lender – So you know that $8,000 that you have socked away to put down on a Single Family conventional loan and cover basic rehab so you can flip or rent that is just sitting in the bank —Alert! Alert! Did you know you can make more interest loaning it out and have it back in time for your future closing? Is there a successful flipper in your area or a seasoned short sale expert? They often need “bridge” loans or temporary financing to carry them through until they close or flip.
My Uncle borrowed $6000 from me to purchase his second home. He paid me 8% interest only for 6 months, around $480, and skipped 2 months (it was near closing and holiday time) and paid me back my full principal with a balloon payment in the 9th month totaling $6300.00.
Let's do the math – Principal Loan for $6000 with a 6 – 9 month repayment schedule at 8% interest. I made $3180.00, just a little over half of what I loaned out for a 53% return. This is a simple situation where my Uncle did not have a large reserve, but needed to buy a house and show that he had guaranteed funds upfront. He was in the process of retiring and putting a daughter through college so was strapped for cash. Also the money could not have just appeared that is why he needed it a few months ahead of time so he would not have to do any “explaining”.
Borrower – Let's say you already have 5 rental properties that have outstanding loans. Your credit profile is stellar, and you have a proven track record that you know what you are doing and go down to the bank or credit union with a small presentation for a loan to buy a Fourplex. Their response, here's a pen and get to stepping. So what do you do?
The list is endless, but seek out other investors, professionals that have cash for investments (athletes, doctors, lawyers, etc), and friends & family. You make get small loans or someone to give it all to you in one big check, either way – secure it with a contract. After you've gotten control of the property, made some improvements and created value you can always refinance and use the proceeds to pay back your private investors and enjoy some of the profit for your self.
Investing in some of the less conventional real estate investing niches can be quite profitable, not as competitive and less taxing on your time and energy.
It is always great to diversify your skills and your investing portfolio. You can always learn more about some of these real estate investing topics from experts through their Podcasts, Courses or REIClub Interview Series niche sets.