How To Make Money in Real Estate: 5 Creative Ways

I talk to investors all the time that seem to be struggling in their business or struggling getting started. I guess as great as this business is, it is not as glamorous as you see on TV. The truth is, this business will provide everything you want, but you need to work at it. Cash flow is king, so your first priority has got to be generating income. Once you have your income stream and some reserves, then you can focus on hitting home runs with flips, larger deals, or focus on rental properties.

Obviously a job, whether its salary or commission, is the easiest way to generate the needed income, and I am in no way suggesting you quit your job to start into real estate full time. I am simply giving you some creative ideas to generate income if you are not currently working or to supplement your current income.

Flipping Terms Deals

I don’t know anyone doing this, so there is obviously a need. I would love to buy some terms deals and I know I am not alone. A terms deal means a deal where the seller of the property structured the transaction with quality terms and not necessarily the best cash price. For example, a seller might own a property free and clear and be dead set on a price. That seller might be set on the price but be willing to take the price in payments, making it attractive to investors who don’t want or can’t get their own financing. Some examples of terms deals include; subject-to, lease options, and other owner carry transactions.

The deal is high quality if it produces monthly income. Even $100 positive a month is quality with these deals. If you sell a deal that produces $100 a month after expenses for $6,000, that is still a 20% return on investment for your buyer and you get $6,000 without any cash, credit or risk.

Tenant Placement

I think this is finally becoming more popular, but there is still a need. Many investors want to manage their own property but hate showing it to new prospects and processing applications. It is also harder to market one property than several. With several, you can take a call and give the prospect options. This is why management companies are often more successful filling homes than you might be. They have lots of marketing out there, and lot of properties to choose from. It also makes each lead more valuable to the person doing the tenant placement because there is a higher conversion rate. It is really a win-win.

With all this said, tenant placement is still going to be a lot of work. You might be driving around showing houses and taking calls, and you will only get paid when you place a tenant. The most common fee that I see for this service is 1/2 of the monthly rent. It is not uncommon to place several tenants in a month working part time.

Become a Real Estate Assistant

I know that successful full time investors use assistants. The assistants normally do things like put together marketing campaigns, manage properties, handle the finances, and more. Successful investors normally focus on finding deals and look at their business on a broad scale. They need someone to help pay attention to the details. This could be a great opportunity to work in and learn the business while you make some money.

Sorry I don’t know any investors that currently need an assistant, but they are out there. Keep an eye on LinkedIn and be sure to attend networking meetings.

Bird dogging

This is a real beginner way to wholesale property. I say that because bird dogging does not require any credit, money or experience. It is a great way to make some money while you learn to wholesale. You will make much more money (twice as much, or more,) if you wholesale. However, wholesaling can be a little risky if not done correctly. Wholesaling often times also takes at least some money for the earnest money deposits.

Bird dogging is really just going out and finding leads on deals; not actually finding deals like a wholesaler. Investors will pay for those leads if they turn into deals. So a bird dogger just introduces a deal or a motivated seller to the real estate investor and lets the investor put the deal together. Fees normally range from $1,000 to $3,000, depending on the investor and the deal they are able to put together.

Foreclosure Consultant

You need to be VERY, VERY careful here. In fact, you should probably come up with a brief business plan and run it by a real estate attorney in your state. For example, if you are dealing with sellers in Connecticut in foreclosure, and don’t take certain steps and have certain disclosures, you can face jail time. I don’t want this to scare you because this is a great income maker and could turn into a very profitable full time business.

Foreclosure consultants will generally speak with people in default about their options. Options could include; refinancing, modifications, short sales, or just selling the property if there is enough equity. There are certain ways you can charge fees and who you would charge the fees to. You can charge the borrower fees if you work out modifications or you can become a mortgage broker and charge fees on refinances. Normally it is best to work with the bank on a short sale and charge commissions, or charge fees to buyers of your deals. You can also pass leads onto investors or Realtors for fees. If you are giving leads to Realtors, you will either need to also be licensed, (which is not a bad idea to do by the way) or charge marketing fees for lead generation that is not tied to specific leads. For example, maybe the agent gives you $50 per door you knock on instead of $1,000 for a short sale lead. If you do decide to focus on foreclosures, I think you will do very well’ but I also suggest you get your real estate license so you can charge commissions AND be sure you are not violating any laws.

Out of all 5 options listed here, I think the foreclosure consultant has the highest upside and I strongly believe that people who focus their energy here will become very successful. If I was a licensed Realtor and wanting to focus on real estate as a business, I would be doing this.


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