It’s no secret that you can make money by starting a real estate venture. However, you may not be familiar with the best ideas to implement when starting out. Here are the best ideas for starting a business in real estate:
- House Flipping: This involves purchasing distressed properties, fixing as well as modernizing them before you sell them for profit. Though you may not get continuous cash flow from house flipping, you can make large, one-time profits. You can also do it as a part time venture.
- Wholesaling Houses: You can wholesale properties by putting a property under contract at a discount, then assign the contract to another entity at a markup. The profit made by the wholesaler is the difference between the price contracted with the original seller and the amount the buyer pays.
- Property Management: You don’t have to be a property owner to make money in the real estate industry. Starting a property management business can be lucrative and scalable. This entails handling maintenance and upkeep as well as rent collection and evictions on behalf of property owners. Typically, a property manager charges around 6-10% of gross rents collected, in addition to other fees for services provided.
- Real Estate Agent: This is the most common way people venture into the real estate industry. Formal education, state certification, and experience is required to start out as a real estate agent in some places. Real estate agents earn commissions from property sales, leases, and referral fees.
- Real Estate Syndicator: Syndicators pool together money from many investors to purchase large commercial properties and portfolios. While having a track record and team are usually a prerequisite for real estate syndicators, this is a great example of using Other People’s Money (OPM) to fund your deals.
- Funding Broker: This is essentially a referral business that you can start by creating a list of funding sources, such as hard money lenders, private money lenders, and conventional mortgage lenders, and making a fee by sending them clients. You’ll source and work with investors looking to fund their deals, then pair them with a lender for a fee of usually 1-3% of the loan amount.
- Bird Dogging: This entails finding good deals for real estate investors to earn a flat-rate fee or a percentage of the entire deal.
- Real Estate Photography: This entails taking professional photos for property sellers and landlords. Real estate photographers are paid by the job. The photos are mostly used for online property listings on the Multiple Listing Service (MLS).
- Property Inspections: Becoming a home inspector will not only sharpen your real estate investing skills but can also produce an income if you turn your know-how into a business.