There is a lot of advice floating around the internet on how to invest $200K in real estate. If you spend any amount of time searching for answers to your investing questions online, you’ve probably seen the chatter yourself. For the most part, I like seeing more established investors counsel the up-and-comers on where to start investing in real estate. And, there are a lot of decent ideas out there.
But, as a long-time pro who also mentors new investors to ensure they succeed on their own terms, I have to say that ‘decent’ isn’t good enough. In my experience, you’ve got two options that have more potential than others when it comes to setting you on a successful real estate investment career path. I consider both of them here, so that you can get on with achieving your goals.
How to Invest $200K in Real Estate as a New Investor
Not everyone is in the financial position of being able to ask how to invest $200K in real estate. Instead, a lot of new investors struggle with how they’re going to build a real estate investment business with little-to-no startup cash—something that isn’t impossible to do, but can be hard to fathom. Having funds to get going right out of the gate does put you ahead in the game, though. It speaks well of your business savvy and fiscal responsibility as well. And, because there are risks to investing in residential real estate, continuing toeing that shrewd, responsible line is going to be more important than ever—if you are to succeed.
So, to that end, I want to consider two of your best options for building a professional investment business. The first is a fairly popular choice and for good reason. The second is a less common alternative that, depending on what your goals are, could be the better of the two. Here they are:
Option One: Buy and Rehab a Home to Sell
Depending on the available inventory of fixer-uppers in your area and the overall cost of entry into the local market, you may be able to invest in one—maybe two—low-priced houses to rehab and sell. The reason I consider this option to be one of the better ones out there when you’ve got money to spend is that you can, potentially, make your money back and then some. And, it’s that fairly fast return on investment—your ROI—that is a critical component to growing an investing business. After all, you can take those returns, expand your existing pool of funds, then reinvest them into more properties or bigger projects or both.
Without knowing all the ins-and-outs of this real estate investment strategy, however, you can risk all the money you’ve got and more if a potentially good deal turns out to be a bad idea. So, before jumping right in—especially when going it alone—first invest in a comprehensive training program that teaches you everything there is to know about buying, renovating, and selling homes. That includes how you convert leads into sales, calculate costs so that you buy at the right price, and market your properties to sell at or above their after repair value (ARV).
But, because every deal is ultimately different, even the best real estate investor training programs may not help you make tough calls or navigate sticky situations. That’s where one-on-one mentoring comes in. And, though good classes and great mentors can get pricey, it won’t be nearly as expensive as trying to buy and rehab one or more houses with little-to-no experience. Still, armed with a solid education and a team invested in your success, $200K can jump start your career—and that’s what makes this choice an attractive one.
As popular as this option is with new investors who’ve got the cash to spend, however, there’s something else you’ve got to keep in mind. While investing $200K in a house can jump start your career, it won’t necessarily help you sustain it. Assuming all things go well on the first home you buy, repair, and sell, your returns still won’t likely be the show-stopping profits you see on reality TV—and that’s normal. In this business, you have to invest in a lot of real estate, making few if any mistakes along the way, just to make a good living.
And, that leads me to option two.
Option Two: Buy a Real Estate Investing Franchise
Rather than running right out and spending $200K on buying your first investment property—or, maybe, two—so that you can, hopefully, make some money on the deals, consider buying a real estate investing franchise from HomeVestors®. The benefit of buying a franchise with a track record as successful as HomeVestors is that you gain immediate access to an established business model that’s proven to work plus name-brand recognition that homeowners trust. You also get some of the best tools and resources you need to start investing professionally, including access to qualified leads. And, your initial week-long training sets you up to understand how to go about buying, rehabbing, and selling homes. So, you’ll know what to do the moment you start doing it—like any old pro.
The benefits of being an independently owned and operated franchisee don’t stop there. Whether you choose the full franchise or part-time option, you will have your own Development Agent on call for mentoring, ongoing support, and to generally keep you on track for realizing your business goals. You’ll also have a network of regional franchisees that you can lean on for expert recommendations and a sense of camaraderie. That means you’ll always have someone—several someones, in fact—at your back pushing you forward, if needed. And, this ongoing training and support comes with your franchise at no additional cost.
If you’re worried about how you’re going to fund your deals once you’ve bought a franchise, don’t be. The franchise opportunities that are available from HomeVestors grant you territorial rights at a cost that still leaves cash in your pocket. Additionally, as an independently owned and operated HomeVestors® franchisee, getting the money you need to buy, renovate, and sell homes won’t be a problem because HomeVestors provides access to financing for qualifying purchases and repairs. Plus, with the new proprietary lending portal, you’ll also have the option to connect with some of the best hard money lenders nationwide that will compete for your business because you’re part of the HomeVestors® team.
When it comes to being able to build your professional real estate investment business fast, there are few better ways to spend your hard-earned cash than on a HomeVestors franchise.
Fast Track Your Career With a HomeVestors® Franchise
I entered this business with a little cash-in-pocket way back when and almost spent too much time debating what I was going to do with it. And, as a part of an older generation, I didn’t have access to today’s internet for seeking answers to my questions. But, I was still resourceful. So, the tack I took was to find a highly successful real estate investor and model their behavior. And, that’s why I joined HomeVestors as an independently owned and operated franchisee.
And, that long-ago decision to buy a HomeVestors® franchise didn’t just help me buy, rehab, and sell a home or two, it helped to fast track my investing career. Now that I’m a Development Agent, too, I guide other new investors towards accomplishing the same.
Stop wondering how to invest $200K in real estate and start investing in your professional real estate career. Call HomeVestors to discuss your franchise options today.
Each franchise office is independently owned and operated.