Last year yielded quite a rush in the housing market. A strong seller's market is what kicked off, more demand than the available supply, accompanied by unprecedented offers. Many buyers found themselves in the throes of the market, bidding wars and outrageous offers.
Whether you were a first-time homebuyer, new or seasoned investor, the Los Angeles housing market had a place for you among its inventory. It still does.
Greater Los Angeles has maintained one of the hottest markets seeing median rates peak as high as 680K.
However, after experiencing an exponential climb over the past year, the market seems to be cooling.
A cooling market may be the opportunity some have been looking for to start their home buying process. It could mean less stress for the buyers who are gearing up to purchase. Or the buyer's who had been looking for a break in the chaos.
A slow down in activity does not mean that the market is headed for a crash at all. Nor does it indicate a fall in prices.
The state of the housing market has been relatively unstable. Many have likened the conditions of it to those of the 2008 housing market crisis before the crash. Nationally, The housing market has seen a downward trend over the past year regarding homes sold and the number of homes placed on the market. However, there was a 16.2% increase in the market value of listed homes, with a median rate of $380,271.
While the housing market may be experiencing an overall tightness with inventory, the renter's market has been thriving. A thriving rental market serves as great news for investors, signaling that ample opportunity still exists in abundance among the housing market's chaos.
As for all investing, there is a great risk but potentially a greater reward. Whether it is the lack of capital or looking to learn how to start investing, here are a few real estate investment opportunities to ease your way into the investing arena.
How To Start Investing With Minimal Capital
Real Estate Investment Trust (REIT)
A Real Estate Investment Trust or REITs are often overlooked, but they are perfect for new investors. The origin of REITs dates back to the 1960s as a way for more people to earn wealth in real estate. Today there are an estimated 87 million holders of REITs. Considering the investment is shared, it allows individuals to get started with a smaller investment amount.
Investing in a REIT is placing capital in shares of stock in a real estate asset. Unlike traditional investments, your return is reflected in the appreciation of the asset. Typically an investor's return is settled at the sale of the asset in a lump sum.
Real estate wholesale is an investment approach that is quite simple to get started in. However, it is crucial to understand that the simplicity of getting started does not equate to an easy money scheme of some sort. Wholesale investing requires attention to detail along with some market knowledge.
It is possible to get started without any money and have a lucrative start. However, if you are investing with absolutely no money, connecting with others who know the trade and learn is essential. Seek out and connect with active wholesalers in your area.
Surrounding yourself with doers and educating yourself on wholesale investing will help guide you further in your efforts. Education and preparation include connecting with buyers and developing a buyer's list. When starting out, your buyer's list may not seem extremely useful, but it is. Connecting with buyers could mean having access to individuals who may be interested in purchasing a property from your network while you are becoming better. Connecting sales gives leverage in Negotiate a finders fee and possible kickback.
Scouting properties for experienced wholesalers is an opportunity to jump in and get started while getting paid as you learn. The more you understand the process, the better you understand the risks and rewards. Your buyers' list will become more valuable and grow, so will your returns.
Short-term rental (often referred to as BnB)
Short-term rental is in no way new, but it is making waves among new investors. It is becoming a near-instant way for everyday people to jump out there in the world of real estate investing.
Short-term rental allows you to convert structures that you may already own into a rental space.
If you live in an advantageous area such as a hotspot for sports events, cultural events, or even if you have a home on a lake that can double over as a unique and tranquil getaway, you could be sitting on an investment capable of a pleasant return.
A Converted Space
Have you converted your garage or been thinking about it? Or do you have a utility shed that you don't seem to know what to do with? Converted spaces are among the latest ways to get into passive income among real estate investors.
A Current Investment Property Or A Rental Property
If you do not have a converter space or prefer not to use your primary residence as an investment asset, it is still possible.
The short-term rental market, often referred to as the BnB market, is composed of single-family homes but is filled with apartments, duplexes, and even specialty dwellings such as tree houses!
While the market may be slowing down in purchasing primary residences, it is not reflective of available investment opportunities. In addition to the growing number of ways to enter the investment market, a couple of things to keep in mind are:
There are several ways to start investing with little capital.
Entering where you are and continuing to reinvest your return to build your capital is ideal.
It is necessary to connect with like-minded individuals in the investment arena who can provide growth and mentorship opportunities. Also, to mention, when operating with smaller capital, pooling opportunities will work in your favor.
Are you looking to invest but working with a small amount of capital? We can help make sense of the many opportunities available. At Betula Lenta, we focus on more. Our services are more than developing assets. We develop assets that drive home returns. Our team is a selective group of professionals who, through trial, error, knowledge, and networking, continue to master real estate development through strategy-driven efforts.
Betula Lenta is dedicated to helping investors and developers realize their ideas to their highest potential.
Looking to learn more about the development and investment opportunities we offer, contact us!