Real Estate For Investors – The Complete Guide[+Case Study]

how to invest in real estate
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how to invest in real estate

You don’t have to be a big investor before you can invest in real estate.

The good news? it’s that you can start on a tiny budget.

In this guide, I’ll walk you through the 5 steps process that will help you invest better even on a tiny budget.

invest in real estate

Let’s get started.

The real estate investment you choose is up to you.

However, there are 5 things you need to consider depending on the type of investment you look forward to.

In this guide, I’ll walk you through the 5 steps process that will help you invest better even as an investor.

In fact:

These proven strategies of investing in real estate have helped our real estate company grow by doing 2 billion Naira in sales consistently for over 2 years.

And in this guide, I’ll show you 5 superb real estate tips and tricks that are working super crazy right now.

Things to expect:

The simple hack to become a real estate investor with little money(even as beginners):

  • #1 – Is real estate crowdfunding a good investment for investors?
  • #2 – Build on wholesale real estate or investing
  • #3 – Is credit score still important?
  • #4 – How to use real estate trading for more cash flow
  • #5 – Invest in flipping property

So if you want to invest in real estate on a little budget, you’ll love the strategies in this new guide.

Sweet!

Let’s dive in

Is real estate crowdfunding a good investment for investors?

The answer is, super ‘YES

First, in this chapter, I’ll answer the question “what is real estate crowdfunding” and “what does real estate crowdfunding mean”.

I’ll also walk you through why real estate crowdfunding is still super important for beginners today.

So, where should I begin from?

Alright! Let’s start this way:

What is real estate crowdfunding?

Real estate crowdfunding is defined as an equity terms use for investors who use crowdfunding websites or platforms to raise funds or capital for the purpose of investing in real estate.

Why is real estate crowdfunding important?

To understand that, you’ll need to track back.

That will be super helpful.

Fast forward to 2012, real estate crowdfunding began, the famous Jobs Act changed the game.

Instead of simply raising funds yourself, the Act was initiated that linked crowdfunding to be used as a way for the private investment project to raise capital from the public.

Nearly 7 years later, crowdfunding remains one of the best ways to determine the equity of investment.

That’s why crowdfunding remains one of the most secure real estate investments.

Investors now focus on crowdfunding(for several reasons whether for donation, debt-based, or equity).

You might be wondering.

How is crowdfunding useful? and how do I invest in them on a tiny budget?

That’s what I’m going to cover right now.

Before I dive into the statistics and proven results, it’s important to know what makes a good(or bad) crowdfunding investment.

That way, you can focus on a specific type of investment that will actually improve your cash flow.

That said, here’s how to identify crowdfunding that is actually worth investing in.

Types of crowdfunding investment

  • #1- Reward-based
  • #2- Debt-based
  • #3- Equity
  • #4- Donate-based

Step #1 – Reward-based

Here’s how this works.

Reward-based crowdfunding is completely different than for debt-based crowdfunding.

Reason #1 – This works just for a new startup or company.

You can get a helping hand from stand-alone investors, these investors will help raise funds for your startups.

After all, they’ll earn rewards based on the funds raised.

Step #2 – Debt-based

Let me show you how this work:

First, this type of investment has little impact on your cash flow.

Instead, you’re wondering how to pay back.

But, the interesting part is that the loan deal is on a lower interest rate.

So it’s clear that, if you need some funds, you’re not required to pay them back until your start-up investment begins to generate returns.

You can get quick loan benchmarks at a lower interest rate.

This can be super helpful.

Step #3 – Equity crowdfunding

If you are not a stand-alone investor.

I would not recommend this for you especially if you’re not a big player in the game.

But if you are.

And if you want to dig even deeper into real estate investment, you can start with equity crowdfunding.

Here’s how this work:

You can leverage with a company that will provide you(investor) with shares in the company.

And in return, you become a big shareholder of the company.

My advice:

Most times, this only works well for investors with a good credit score.

That’s why I recommend new startups and beginners to fade off in the distance from this kind of investment.

For some reason, it will suck you hard.

Step #4 – Donate-based

This is super helpful if you are on a tiny budget.

Here’s why:

You can find investors who are willing to serve as benchmarks.

The next process is that these investors are ready to raise funds or capital without expecting any returns.

Sweet!

So let’s dive into the next step, the leftover statistics.

Remember, I said I will pick it up.

For this reason, I will explain now.

Here are a few crowdfunding statistics you need to know about:

  • $17.2 billion is generated yearly through crowdfunding in North America(Fundera)
  • Transaction value in the crowdfunding segment is projected to reach $2 million in 2022 in Nigeria(Statista.com)
  • Funds raised through crowdfunding grew 33.7% last year.
  • There were 6,455,080 worldwide crowdfunding campaigns last year.
  • Successful crowdfunding campaigns have raised $28,656 on average.
  • The average amount raised by all crowdfunding campaigns last year was $824.
  • 22.4% is the average success rate of crowdfunding campaigns.
  • Overall crowdfunding projects have an average of 47 backers.
  • Fully funded crowdfunding projects have an average of 300 backers.
  • The average pledge for fully-funded projects is $96.
  • The average pledge for all crowdfunding projects is $88.
  • The crowdfunding market is projected to grow to $300 billion by 2030.
  • And there are projected to be  12,063,870 campaigns by 2023.
  • Crowdfunding campaigns with videos earn 105% more than those without videos.
  • Campaigns that updated followers regularly raised 126% more than those with no updates.
  • Crowdfunding campaigns that raise at least 30% of their goal within their first week are more likely to reach their goal.
  • 53% of email shares of crowdfunding campaigns convert into donations.
  • 12% of Facebook shares convert to donations.
  • 3% of Twitter shares convert to donations.
  • All-or-nothing model campaigns are funded fully at twice the rate of keep-it-all campaigns.
  • Adding personal information to your campaign could get you 79% more backers.
  • 42% of funds are raised in the first and last three days of an average crowdfunding campaign.
  • The average word count for successful crowdfunding campaigns is 300 to 500 words.
  • Team-driven crowdfunding campaigns raise 38% more than solo campaigns.
  • Those aged 24-35 are much more likely to participate in crowdfunding campaigns.
  • Those over 45 are significantly less likely to back campaigns according to Fundera.com

Interesting, right?

Why?

Because it’s the easiest way to raise money for your real estate project.

And crowdfunding is one of the fastest ways to improve your cash flows.

That’s because you can get investors or lenders in about 2 days.

And start to see people donating within days.

Keep in mind:

But where you invest is just as important as how you get your crowdfunding returns.

Of course, you want to make sure you have completed tasks at least helping you gain returns to make sure you have fewer hassles of fixing and flipping homes yourself.

For sure:

If you want to get more independent with your real estate investment, I recommend you to invest in this real estate.

And here’s why.

First, you will be able to invest in a wide range of properties, you can compare investments with each other.

As it turns out, you don’t have to run into any deal with mortgage brokers or real estate agents.

But what you may not know is that you can use crowdfunding sites or platforms to take care of your day-to-day tasks to ensure successful returns.

Like:

…Fundrise

For Nigeria, maybe – Rise vest

And yes, even – Crowdstreet

In fact:

Nigerians saw crowdfunding platforms in profit increase as high as 20% ROI within a year.

And they are not alone – What about north Americans, over 30% increase.

Or Europe, over 33% increase.

Another fact:

Real estate crowdfunding grew by over 140% over the past 5 years.

Based on the analysis, an estimated 50,000 individual investors participated in real estate syndication offered through real estate crowdfunding platforms according to growercrowd

According to the study they further conducted:

They discovered that sponsors offered a preferred return ranging from 0 – 22%, with 40% of sponsors offering an 8% preferred return.

Why does this strategy work?

First, investors want secured capital and legal contracts in place.

In fact:

There’s an overlap.

With more investors registering on different platforms for wider access to deals.

And they are millions of them.

This is something that pays off.

And why?

…It’s because you don’t need a ton of sacrifice, you can save up your energy, you can save up your asset and still see successful returns.

The good news? you can place your investment just in your comfort zone right in front of your smartphone and get access to a variety of deals.

But there’s one problem, and that’s:

You’ll have to create a diversified portfolio that can help you lower the overall risks of investing in real estate crowdfunding.

The reason why:

There’s something called – “attractive market”

And there are many of them in the market.

If you can get it right – I’ve got a piece of great news for you.

You can start investing on a tiny budget and see great returns.

First, you have to understand the market and that’s why I recommend you to go back and think deeply along with a strategy.

If done right, you’ll likely do well.

Build on wholesale real estate or investing

The good news is:

You can start wholesale real estate with little money.

The question is:

Do you have a bunch of networks on your contact lists?

If so, you can probably improve your cash flows by updating someone’s property on the market.

Let me show you how this works with a real-life example.

You can stand as a wholesale.

Your next step will be to find a seller whose property is not live on the market yet.

Specifically, you can find a buyer for the property and take a commission of the selling price.

Great, right?

As long as you can find a buyer, you’ll continuously see a cash flow of income.

And that’s important.

Sometimes it’s not so easy to screw up. If you’re the reserved type you may not do well in this aspect of real estate marketing.

For one reason:

You have to learn how to build relationships before you can earn.

The beautiful thing is,

You can start with no money or assets.

Other alternatives are:

#1 Flexible selling point – Let me show you how this work

There are sellers who have ready-made properties for sale and they are ready to sell to investors for as little as 4% outright.

This is a good start:

I guess so, isn’t it?

And if you find out it’s super easy to avoid spending big money on renovation.

This is one of my favorite real estate investments, it’s super effective.

First, you have to understand something.

For sellers, they have high-interest rates so it’s important to calculate the cash flow.

Another thing is that:

You can borrow the money that you need if you have a good credit score.

Why is this important?

Credit score

First, in this chapter, I’ll answer the question “what cash credit really means”? and “why it’s so important”?

The only way to get better and even better in the building of land or homeownership is – a credit score.

So, what is a credit score exactly?

Credit score can be defined as a report lenders see as a necessity for financial management or financial risks that serve up as a factor to determine eligibility for a service. And the average good credit score report is 752.

Why should you care?

Many real state consultants or lenders see credit score as your greatest financial asset.

Take a look at this:

Here’s an example,

Let’s say we have two homebuyers in Lekki who want to buy a home and they need a 70 million home loan.

Borrower A, with a credit score of 560, qualifies for a rate of around 6%, and the monthly payment will be 1,275 Naira.

And borrower B, with a credit score of 760, qualifies for a rate of around 4%, and the monthly payment will be 745 Naira.

Of course, you can say:

Borrower A and B have a credit score difference of 200 points and this cost Borrower A 530 Nairas more per month in interest fee.

In fact:

After 4 years, borrower A will pay 10x more than borrower B.

This is true.

That’s why if you continue to qualify for conventional or mortgage loans with lower credit scores, you’ll suffer for each loan received every time.

So if you have to look towards appreciation through conventional loans so that you get real estate property finance, you have to check your credit score.

Of course, it’s important.

That’s why it’s important you have a clear understanding of what your credit report is all about.

Because, it’s not only about the insights but you can use it as a powerful weapon in your financial bottom line when it comes to saving money, getting the best deals and rates on services over time.

And why?

It’s just simple.

As you just saw above, just a 200 points score can mean the difference between thousands or millions of Nairas of time wasted on the higher interest rates and fees.

That’s step #1.

Next, into financial freedom is:

…I’ve mentioned this in my last guide.

Here’s the point.

You can buy a home, live in one apartment while you rent another side out just for extra cash flow.

Unlike most strategies, this works perfectly well.

Because why one thing about this real estate marketing strategy is that the cash flow you generated from the rental property of the home will probably pay a good portion for your conventional loan for the course of 3 years.

Another one is:

You can purchase a home, have zero cash downright, live in the house for a minimum of 2 years, and then pack out and turn the home into a rental property.

#1 – You already have equity.

The down payment and credit score rules will be less effective.

Invest in real estate trading for more cash flow

You can buy investment properties with a little money.

This can be for other assets.

For example, you can offer your car to investors in exchange for a down payment.

First, you’ve to write up a legal document including the value of both assets.

Best advice:

Try to exchange things other than property to obtain a new investment.

That can be super useful.

Invest in flipping property

Does flipping property worth it?

I think, a big yes!

And this is key.

Because there are millions of ways to make money through REIT or flip contracts.

Let me show you a quick strategy that works well.

For instance, you can invest in REIT and still make money per year.

The fucking deal is:

You can flip contracts and make tons of money for a living.

How does this work?

Your first step is to find investors who are ready to pay down payment outright but you will have to find the properties.

If they are willing to pay for it, that’s a piece of good news and it’s great.

Your next step is that you will manage the properties, search for tenants and manage the tenants and you have to take care of any damage and bills.

If you have a buzzing market.

You’ll make a decent profit and you will earn establish credit to buy your own property.

It’s not so easy but it can be extremely lucrative.

Another one is:

You buy raw land, wait for a year and see it appreciate with a great return on investment.

It’s just that simple.

And our team can work that out for you.

We’ll help you invest in our most profitable locations.

Conclusion

Now that you know how to go about investing in real estate as an investor.

If you are looking forward to investing in real estate.

The fact is:

Our team is ready to gladly make it work. I want to invest

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