A Few Ways to Invest in Real Estate

*This Article is for education purposes and we are not offering any legal or tax advice, please seek a professional.

Want to invest in Real Estate? Yes? Good, Here are a few ways to invest.

For most Americans, owning a home has been a dream for decades, but there are instances where you need 20% down, and maybe you will live there for a year then turn around and rent it out and become a landlord. But what happens if you don’t have that much to put down?

And some, like Chase Bank has changed their criteria where now you need a 700 credit score to qualify for a mortgage, so, what can we do?

Some Ways to Invest 

In 2012 the Jobs Act allows Non-Accredited investors to invest in startups. Crowdfunding has been around for a few years now, some offer as low as $500.00 to invest in their funds, but unfortunately there are online scams, so I implore you to do your own due diligence. 

Platforms Sites Which Feature Real Estate

Real Estate Investment Trusts, Known as Reits

These companies own and in most cases operate income producing assets, Reits  own many types of real estate like- Offices, Apartment houses, warehouses and storage units, and they pay out dividends to investors.

I bought my first Reit in 2011, most people will say that’s not investing in real estate, but the great investor Warren Buffet said, when you buy a stock in a company, you now own a part of a business, and, you can buy a reit with one share. 

Owning a Home

Now if you are a first time homebuyer and your credit score is not up the par, in other words if you don’t have a 700+ credit score, the banks could turn you down, you can turn to FHA, The FHA allows as little as 3.5% down, and you can own up to four units, live in one and rent out the other three, but this has to be your primary residence, so please follow the law. 

What is a FHA Loan?

The Federal Housing Administration provides mortgage insurance on loans made by FHA approved lenders. FHA insures these loans on single family and multi-family (1-4 Units) homes in the United States, it is the largest insurer of residential mortgages in the world, insuring millions of properties since 1934 when it was formed. 

Criteria to Qualify for FHA

  • Credit score at least 580 = 3.5% down
  • Credit score between 500 up-to 579 = 10% down
  • MIP (Mortgage Insurance Premium) is required
  • Debt-to-income ratio < 43% Ex: if you have a $1,000 credit card, you should not be over $430 dollars in credit usage.
  • The home must be the borrower’s primary residence
  • Borrower must have proof of employment and steady income 
  • Available on 1-4 unit properties.

FHA Approved Lender Link



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