How do you invest in real estate without using money?
I know this is broad, but this isn't a scam -- it's a   workshop/educational thing about teaching people of investing in the   real estate market, and how to profit The scam is that the free or cheap class doesn't give you enough info to make money; so they sell you a more advanced and expensive class that gets you almost enough info; but the goal of the 2nd class is to get you to pay for the specialized seminar and coaching sessions that either fail to materialize or  are so basic they aren't worth the money. Sounds like the seminar is about using OPM (other people's money), which means you're going to have to find not just real estate, but investors.  Those investors are going to need a business plan, contracts, and a lot of work from you to provide as much equity as possible before the property is sold.  If you're serious about Real Estate, I suggest finding the most successful broker/agent you can, buying them a beer, glass of wine, or cup of coffee, and picking their brain about it. It'll be cheaper then a scam seminar. This is one way in which the scheme could work: You put your own property (home, car, piece of land) as a collateral and get a loan from a bank. You can also try to use the purchased property as security, but it may be difficult to get 100% loan-to-value. You use the money to buy a property that you expect will rise in value and/or provide rent income that is larger than the mortgage payment. Doing some renovations can help the value rise. You sell the property, pay back the loan and get the profits. If you are fast, you might be able to do this even before the first mortgage payment is due. So yeah, $0 of your own cash invested. But if the property doesn't rise in value, you may end up losing the collateral. They're probably talking about flipping houses. The conventional wisdom when flipping is to purchase the property with a mortgage or other loan on day-0. Do the work to rehabilitate it. Get it listed for re-sale promptly (this step has varying strategies) with a profitable price but one that will make it move. Have the house sold on or before the first payment would be due. This is anywhere from 30 to 60 days. The flipper then never has to make a payment on the mortgage or loan, the costs of rehabilitating the home are recovered promptly (potentially before any loan, credit card payments, or invoices are due), and there is a profit. This also assumes that either a 100% loan or some other mechanism is used to address closing costs and fees. This model fits the premise of the infomercial in that you make money investing in real estate but never have to tie up any of your own money in the process. I've been to one of these seminars:  a) you can get a loan of up to $700,000 from the company and only have to pay a fixed amount for the use of money, but you have to pay the loan off in nine months.  Or b) you can just invest say $50,000 and you'll get a return of say 4%.  But what the company does is take all of the investor's money and use that to fund the loans (putting none of the company’s money at risk), and that fixed amout sounds reasonable until you realize that it's only for a part of the year so the real APY is actually much higher than the conventional lending rate; or the rate they are paying the investors. There is (almost) always money involved somewhere, but it doesn't have to come from you.  It can be investors, credit cards, or even seller-financing (I've done all 3). Examples: If you can find partners with the money to make the deals happen, then your job is to put the deal together.  Find the properties, negotiate the price, even get the property under contract (all without any obligation or cost on your part... yes it absolutely can be done).  Then your partners will fund the deal if it's good enough and their terms are met, etc. In some areas you can put a property on a credit card.  If you find a house say for $25,000 that will rent for $300/month, and you can put it on a credit card (especially at zero percent for a year or something similar), then you can generate cashflow as a landlord without putting up any cash of your own on the purchase.  Of course there are many risks associated with landlording and i could tell you horror stories... but we're not addressing that here. You can negotiate a sale with an owner who agrees to finance the entire purchase for you.  I once purchased 3 properties at once this way from a seller who financed the entire sale, all closing costs, everything, this way.  Of course they needed a lot of repair and such so I had to fund that another way, but at least the purchase itself cost me no money out of pocket. So these infomercials/courses are not inherently scams in the sense that what they are teaching is (usually... I'm sure there are exceptions) true.  However they generally give you enough information to get into trouble, and not out.  But that's what true learning is... it's getting into trouble and finding a way out that doesn't kill you.  =)  That's called experience, and you can't buy that for any price. "I have a friend who had went on a seminar with FortuneBuilders (the company that has Than Merrill as CEO). He told me that one of the things taught in that seminar was how to find funding for the property that you want to flip. One of the things he mentioned was that there are so-called ""hard money"" lenders who are willing to lend you the money for the property in exchange for getting their name on the property title. Last time I checked it looked like here in Florida we had at least Bridgewell Capital and Fairview Commercial Lending that were in that business. These hard money lenders get their investment back when the house is sold. So there is some underlying expectation that the house can be sold with some profit (to reimburse both the lender and you for your work). That friend of mine did tell me that he had flipped a house once but that he did not receive the funding to that from a lender but from an in-law, however it was through a similar arrangement."
You can increase your monthly cash flow in two ways: It's really that simple. I'd even argue that to a certain extent, decreasing expenses can be more cash-positive than increasing income by the same amount if you're spending post-tax money because increasing income generally increases your taxes. So if you have a chunk of cash and you want to increase your cash flow, you could decrease debt (like Chris suggested) and it would have the same effect on your monthly cash flow. Or you could invest in something that pays a dividend or pays interest. There are many options other than real estate, including dividend-paying stocks or funds, CDs, bonds, etc. To get started you could open an account with any of the major brokerage firms and get suggestions from their financial professionals, usually for free. They'll help you look at the risk/reward aspects of various investments. "Living in one unit of a multi-family while renting out the others, although not without its risks, can be a viable (if gradual) way to build wealth. It's been rebranded recently as ""house hacking"", but the underlying mechanics have been around for many years (many cities in the Northeast in particular remain chock full of neighborhoods of 3-family homes built and used for exactly that purpose for decades, though now frequently sub-divided into condos).  It's true you'd need to borrow money, but there are a number of reasons why it's certainly at least worth exploring (which is what you seem to be asking -- should you bother doing the homework -- tl;dr: yes): And yes, you would be relying on tenants to meet your monthly expenses, including a mortgage bill that will arrive whether the other units are vacant or not. But in most markets, rental prices are far less volatile than home prices (from the San Francisco Federal Reserve): The main result from this decomposition is that the behavior of the   price-rent ratio for housing mirrors that of the price-dividend ratio   for stocks. The majority of the movement of the price-rent ratio comes   from future returns, not rental growth rates. (Emphasis added) It's also important to remember that rental income must do more than just cover your mortgage -- there's lots of other expenses associated with a rental property, including insurance, taxes, maintenance, vacancy (an allowance for the periods when the property will be empty in between tenants), reserves for capital improvements, and more. As with any investment, it's all about whether the numbers work. (You mentioned not being interested in the ""upkeep work"", so that's another 8-10% off the top to pay for a property manager.) If you can find a property at an attractive price, secure financing on attractive terms, and can be reasonably confident that it will rent in the ballpark of 1.5-2% of the purchase price, then it might be a fine choice for you, assuming you are willing and able to handle the work of being a landlord -- something worth at least as much of your research time as the investment itself.  It sounds like you're still a ways away from having enough for even an FHA down payment, which gives you a great opportunity to find and talk with some local folks who already manage rental properties in your area (for example, you might look for a local chapter of the national Real Estate Investment Association), to get a sense of what's really involved." "If you're looking for a well-rounded view into what it's like to actually own/manage real-estate investments, plus how you can scale things up & keep the management workload relatively low, have a look at the Bigger Pockets community.  There are blogs, podcasts, & interviews there from both full-time & part-time real estate investors. It's been a great resource for me in my investments. More generally, your goal of ""retiring"" within 20 years is very attainable even without getting extravagant investment returns.  A very underrated determinant in how quickly you build wealth is how much of your income you are contributing to investments. Have a look at this article: The Shockingly Simple Math Behind Early Retirement" "One way to ""get into the real estate market"" is to invest your money in a fund which has its value tied to real estate. For example, a Real Estate Investment Trust. This fund would fluctuate largely inline with the property values in the area(s) where the fund puts its money. This would have a few (significant) changes from 'traditional' real estate investing, including:" "I would not advise buying a home because you think you will make money. (1) Return on Investment If you have $290K, have you asked yourself how much your investment would grow if you invested it in other ways.  At 2% growth re-invested, your money would grow to $307K (or 17K) after 4 years.  $290,000 * 1.02 =   $295,800 * 1.02 =   $301,716 * 1.02 =   $307,750  (2) Homeowner Experience Without the experience of owning your own home, it's hard to know relate to complaints and expectations that your tenants might have.  It's hard to know to anticipate problems and repairs and costs due to home ownership.  Homeowners have many decisions to make regarding upkeep of a home.  The costs are difficult to predict if you have no experience to draw upon. (3) Managing Rental Property: It's a ""job"".  You either take on this responsibility, or you subcontract it to someone else who you pay to manage the property and contracts!  Is this something you are passionate about doing? If you need to travel back to the home, it's clear across country.  It's not close enough to visit." I strongly recommend you to invest in either stocks or bonds. Both markets have very strict regulations, and usually follow international standards of governance. Plus, they are closely supervised by local governments, since they look to serve the interests of capital holders in order to attract foreign investment. Real estate investment is not all risky, but regulations tend to be very localized. There are federal, state/county laws and byelaws, the last usually being the most significant in terms of costs (city taxes) and zoning. So if they ever change, that could ruin your investment. Keeping up with them would be hard work, because of language, legal and distance issues (visiting notary's office to sign papers, for example). Another thing to consider is, specially on rural distant areas, the risk of forgers taking your land. In poorer countries you could also face the problem of land invasion, both urban and rural. Solution for that depends on a harsh (fast) or socially populist (slow) local government. Small businesses are out of question for you, frankly. The list of risks (cash stealing, accounting misleading, etc.) is such that you will lose money. Even if you ran the business in your hometown it would not be easy right? You will make very little cash in real estate. Don't think of it like a money farm, unless if you have the capital to forgo the loan. The rent will pay the equity towards owning the place which at any point you can sell into cash. But you won't get lots of spending cash upfront, it takes a while to build.    Source: have a good friend who does this- the second he gets any capital he instantly buys and manages a new property. Poorest rich guy I know Probably the easiest way to invest in hotel rooms in the U.S. is to invest in a Real Estate Investment Trust, or REIT.  REITs are securities that invest in real estate and trade like a stock.  There are different REITs that invest in different things: some own office buildings, some residential rentals, some hold mortgages, and some are diversified in lots of different types of real estate.  There are also REITs that are exclusively invested in hotels. REITs are required to pay out at least 90% of their profits as dividends, and there are tax advantages to investing in REITs.   You can search for a REIT on REIT.com's Searchable Directory.  You can select a type (Lodging/Resorts), a stock exchange (NYSE), investment sector (equity), and a listing status (public), and you'll see lots of investments for you to consider. "I have money to invest. Where should I put it? Anyone who answers with ""Give it to me, I'll invest it for you, don't worry."" needs to be avoided. If your financial advisor gives you this line or equivalent, fire him/her and find another. Before you think about where you should put your money, learn about investing. Take courses, read books, consume blogs and videos on investing in stocks, businesses, real estate, and precious metals. Learn what the risks and rewards are for each, and make an informed decision based on what you learned. Find differing opinions on each type of investment and come to your own conclusions for each. I for example, do not understand stocks, and so do not seriously work the stock market.  Mutual funds make money for the folks selling them whether or not the price goes up or down. You assume all the risk while the mutual fund advisor gets the reward. If you find a mutual fund advisor who cannot recommend the purchase of a product he doesn't sell, he's not an advisor, he's a salesman. Investing in business requires you either to intimately understand businesses and how to fund them, or to hire someone who can make an objective evaluation for you. Again this requires training. I have no such training, and avoid investing in businesses. Investing in real estate also requires you to know what to look for in a property that produces cash flow or capital gains. I took a course, read some books, gained experience and have a knowledgeable team at my disposal so my wins are greater than my losses. Do not be fooled by people telling you that higher risk means higher reward. Risks that you understand and have a detailed plan to mitigate are not risks. It is possible to have higher reward without increasing risk. Again, do your own research. The richest people in the world do not own mutual funds or IRAs or RRSPs or TFSAs, they do their own research and invest in the things I mentioned above." "Not at all impossible. What you need is Fundamental Analysis and Relationship with your investment. If you are just buying shares - not sure you can have those. I will provide examples from my personal experience:  My mother has barely high school education. When she saw house and land prices in Bulgaria, she thought it's impossibly cheap. We lived on rent in Israel, our horrible apartment was worth $1M and it was horrible. We could never imagine buying it because we were middle class at best. My mother insisted that we all sell whatever we have and buy land and houses in Bulgaria. One house, for example, went from $20k to EUR150k between 2001 and 2007. But we knew Bulgaria, we knew how to buy, we knew lawyers, we knew builders.  The company I currently work for. When I joined, share prices were around 240 (2006). They are now (2015) at 1500. I didn't buy because I was repaying mortgage (at 5%). I am very sorry I didn't. Everybody knew 240 is not a real share price for our company - an established (+30 years) software company with piles of cash. We were not a hot startup, outsiders didn't invest. Many developers and finance people WHO WORK IN THE COMPANY made a fortune. Again: relationship, knowledge!  I bought a house in the UK in 2012 - everyone knew house prices were about to go up. I was lucky I had a friend who was a surveyor, he told me: ""buy now or lose money"". I bought a little house for 200k, it is now worth 260k. Not double, but pretty good money!  My point is: take your investment personally. Don't just dump money into something. Once you are an insider, your risk will be almost mitigated and you could buy where you see an opportunity and sell when you feel you are near the maximal real worth of your investment. It's not hard to analyse, it's hard to make a commitment." Insurance - get estimate from an insurance agent who works with policies for commercial real estate.  See comments below regarding incorporation. Taxes - if this was basic income for a simple LLC, estimating 25-40% and adjusting over time might work.  Rental property is a whole different prospect.  Financial experts who specialize in rental properties would be a good source of advice, and worth the cost.  See below regarding incorporating. Real estate appreciation - not something you can count on for developed property.  Appreciation used to be almost guaranteed to at least keep up with inflation.  Now property values are not even guaranteed to go up.  Never have been but the general rule was improved real estate in good repair appreciated in price.  Even if property values increase over time, rental properties depreciate.  In fact, for rental properties, you can claim a certain rate of depreciation over time as an expense on taxes.  This depreciation could mean selling for less than you paid for the property after a number of years, and owing capital gains taxes, since you would owe the difference between the depreciated value and the sale price. Related to taxes are local codes.  Some areas require you to have a property management license to handle buildings with more than a certain number of units. If you are going to own rental properties, you should protect your private financial life by incorporating.  Form a company.  The company will own the property and hire any maintenance people or property managers or security staff or any similar employment activities.  The company takes out the insurance and pays taxes.  The company can pay you a salary.  So, bottom line, you can have the company pay all the expenses and take all the risks.  Then, assuming there's any money left after expenses, the company can pay you a manager's salary.  That way if the worst happens and a tenant breaks their hip in the shower and sues you for ONE MILLION DOLLARS and wins, the company folds and you walk away.  You might even consider two companies.  One to own the property and lease it to a property management company.  The property management company can then go bankrupt in case of some sort of liability issue, in which case you still keep the property, form a new management company, repaint and rename the property and move on. TL;DR:  Get insurance advice from insurance agent before you buy.  Same for taxes from an accountant.  Get trained as a property manager if your local codes require it (might be a good idea anyway).  Incorporate and have the company take all the risks. Investments earn income relative to the principal amounts invested. If you do not have much to invest, then the only way to 'get rich' by investing is to take gambles. And those gambles are more likely to fail than succeed. The simplest way for someone without a high amount of 'capital' [funds available to invest] to build wealth, is to work more, and invest in yourself. Go to school, but only for proven career paths. Take self-study courses. Learn and expand your career opportunities.  Only once you are stable financially, have minimal debt [or, understand and respect the debt you plan to pay down slowly, which some people choose to do with school and house debt], and are able to begin contributing regularly to investment plans, can you put your financial focus on investing. Until then, any investment gains would pale in comparison to gains from building your career. "with 150K € to invest to ""become a landlord"" you have several options: Pay for 100% of one property, and you then will make a significant percentage of the monthly rent as profit each month. That profit can be used to invest in other things, or to save to buy additional properties. At the end of the 21 years in your example, you can sell the flat for return of principal minus selling expenses, or even better make a profit because the property went up in value. Pay 20% down on 5 flats, and then make a much a smaller profit per flat each month due to the mortgage payment for each one. At the end of the 21 years sell the flats. Assuming that a significant portion of the mortgage is paid off each flat will sell for more than the mortgage balance. Thus you will have 5 nice large profits when you sell. something in between 1 and 5 flats. Each has different risks and expenses. With 5 rental properties you are more likely to use a management company, which will add to your monthly cost." All of this makes perfect sense and I can definitely see the logic behind it.  But I don't think Hedge Funds are the way to go. The real money lies in real estate, more specifically land-banking. The problem, though, is that a lot of land-banking investments are really just scams and it's really hard to tell which ones are real and which ones are fake. "This is the best tl;dr I could make, [original](http://www.reuters.com/article/us-markets-oil/oil-ends-on-a-low-after-halving-in-2014-as-opec-stands-aside-idUSKBN0K905620141231) reduced by 76%. (I'm a bot) ***** &gt; NEW YORK - Oil prices fell on Wednesday to a 5-1/2-year low and ended with their second-biggest annual decline ever, down by half since June under pressure from a global glut of crude.  &gt; Weekly U.S. data showed crude oil stockpiles fell more than expected, but inventories at the oil hub at Cushing, Oklahoma, grew, keeping prices depressed.  &gt; Oil prices have collapsed this year as the Organization of the Petroleum Exporting Countries opted to maintain the same level of output despite a global glut caused by expanding U.S. shale output and diminished demand growth from China.   ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/759rn2/the_triggering_factor_for_the_oil_price_drop_in/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ ""Version 1.65, ~224918 tl;drs so far."") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr ""PM's and comments are monitored, constructive feedback is welcome."") | *Top* *keywords*: **Oil**^#1 **Price**^#2 **U.S.**^#3 **crude**^#4 **low**^#5"