21 Best Real Estate Investing Strategies for Beginners in 2022

Are you interested in real estate investing but don’t know where to start? Don’t worry, you’re not alone! There are many different real estates investing strategies that can be used, depending on your goals and experience level. In this blog post, we will discuss 21 of the best real estate investing strategies for beginners. We’ll cover a variety of topics, from buying and holding, house hacking, Air BNB, fix and flips, the BRRRR Method, and much more. So whether you’re just starting or you’re looking for new ideas, read on for the best tips and tricks!

What are the best real estate investing strategies for beginners?

Table Of Contents

1. House Hacking
2. Wholesaling
3. Fix and Flipping
4. Live-in Flipper
5. BRRRR Method
6. Buying and Holding Properties
7. Air BNB
8. VRBO
9. Short-Term Rental
10. Property Tax Lien Investing
11. REIT – Real Estate Investment Trust
12. REIG – Real Estate Investment Group
13. Multi-Family Rentals
14. Commercial Real Estate Property
15. Owner Financing
16. Sub To or Subject To
17. Private Money Investing
18. Hard Money Investing
19. The 1% Rule
20. Build Your Own Team
21. Out of State / Remote
22. FAQ / Frequently Asked Questions

1.) House Hacking

If you’re looking for a real estate investing strategy that can help you earn some extra income, house hacking may be the perfect solution. House hacking refers to buying a property (typically a multi-family home or a single-family home with extra bedrooms) and then renting out part of the property to tenants.

This can be an effective way to offset your mortgage costs and build up equity in your home. In addition, house hacking can help you diversify your real estate portfolio and strengthen your financial position.

If you’re interested in house hacking, there are a few things to keep in mind. First, you’ll need to find a property that is zoned for rental use. Second, you’ll need to screen your tenants carefully and put together a solid lease agreement. Finally, you’ll need to be prepared to handle any maintenance or repair issues. House hacking can be a great place to get your feet wet as a real estate investor before trying out other real estate investing strategies.

2.) Wholesaling

Real estate wholesaling is a form of real estate investing that allows investors to assign the purchase and sale agreement to other investors or buyers for an assignment fee. They make money essentially by finding good deals for others.

In order to be successful at real estate wholesaling, investors must be able to find an undervalued property. They must also be able to build relationships with other real estate investors who may be interested in the properties they have found. By investing in real estate wholesaling, investors can make a profit without ever owning a property. Which makes wholesaling a potential option for those with low credit scores, bad credit, or even no credit.

3.) Fix and Flipping

Buying a home under market value and reselling it for a profit is a real estate investment strategy known as fix and flipping. Most investors who fix and flip homes generally aim to buy a property for 75% of its after repair value (ARV) minus the cost of repairs. The goal is then to sell the property for a profit, typically within a few months.

To find properties that are undervalued, investors often work with wholesalers or real estate agents who specialize in off-market properties. Private money and hard money lending are also utilized often with this method of real estate investing.

Fix and flipping can be a profitable endeavor, but it does come with some risks. The real estate market can be unpredictable at times, and there is always the possibility that the property will not sell for the expected price. Before entering into a fix and flip deal, it is important to do your homework and understand a higher risk tolerance may be needed for flipping houses in comparison to some of the other methods on the list.

4.) Live-in Flipper

If you’re a beginner real estate investor looking for a way to get started in the industry, the live-in flip method may be a good option for you. The basic process involves finding a home that is undervalued and needs some work, fixing it up, living in it for two or more years, and then selling it. By living in the property for a couple of years, you can potentially avoid paying capital gains taxes on the sale (check with a CPA or accountant to verify this will work for you).

Then by flipping the property, you can make a profit that can be reinvested in other real estate ventures. Utilizing your VA or FHA loan can help you get started with a smaller down payment.

Of course, there are some risks involved with house flipping, so it’s important to work with an experienced real estate agent and do your homework before getting started.

Keep in mind that live-in flipping is not for everyone. If you’re not handy or don’t like the idea of living in a fixer-upper, this strategy may not be right for you. But if you’re willing to put in the work, live-in flips can be a great way to get started in the exciting world of real estate investing.

5.) BRRRR Method

The BRRRR method is a real estate investing strategy that can be used to generate passive income and build wealth. The term BRRRR was an acronym coined by the Bigger Pockets hosts Brandon Turner and David Greene. The basic idea is to buy a property, renovate it, rent it out, refinance and repeat.

The rent you collect needs to more than cover the mortgage payments, leaving you with positive cash flow. You can then use the extra cash to pay off the mortgage faster or reinvest in other properties. The BRRRR method is a great way to accelerate your wealth-building efforts by leveraging the velocity of money.

If you do it right, you can potentially pull all of your initial investment back out during this process which allows you to utilize that same money to go and do another deal right away. By investing in rental properties, you can earn monthly rental income and build equity while also creating jobs and supporting your local economy.

6.) Buying and Holding Properties

For many people, the traditional method of investing in rental properties is the way to go. It’s tried and true, and there are a lot of success stories out there. The concept involves buying a property, holding onto it for a good long while, and then sell it when the time is right.

You want to keep the property and rent it out, which can give you a steady stream of income depending on how it cash flows. Sticking to the 1% rule in terms of cash flow has also proven to be a great general rule of thumb in making sure you’re getting a deal that’s worth buying.

There are a lot of upsides to this approach, but may not be the best for beginners or those who want to make a large paycheck anytime soon. You need to be able to find good deals on properties, have the money for a larger down payment, and be prepared to hold onto the property for a while.

Additionally, you need to be comfortable with the ups and downs of the real estate market. If you’re not prepared for all of this, then buying and holding long term rental properties might not be the best option. Whereas wholesaling, house hacking or flipping may be more up your alley.

7.) Air BNB

More and more people are looking into investing in Air BNB rental properties, especially in areas where there is a high demand for short-term rentals. Not only can this most often provide a more positive cash flow than with traditional long term rentals, but it is also a great way to get into owning real estate.

By investing in a property that would otherwise not be generating enough income to make it cash flow properly, you are opening up the opportunity to earn much more passive income by renting it out nightly through AIR BNB.

Additionally, this can be a great method of real estate investing, especially in luxury or tourist markets where there is always a high demand for nightly rental properties. Whether you are looking to invest in your first rental property or you are a seasoned investor, this type of real estate investment to help you generate income.

We do recommend checking with your local planning and zoning to make sure you are allowed to do this method of rental for each specific property. This is best done during your due diligence phase while the property is still under contract.

8.) VRBO

Many real estate investors are looking for new real estate investment strategies in the current market. One option that has become increasingly popular is vacation rental by owner or VRBO. With VRBO, most investors can purchase an entire property and then market it directly to customers through the VRBO platform.

This can be a great way to start investing in real estate, as it does not require the investor to hire a property manager as VRBO enables owners to market the rental directly to customers via VRBO’s platform. It is virtually the same as Air BNB and both platforms are highly rated by both property owners and tenants alike.

9.) Short-Term Rental

If you’re looking for a more flexible and fun way to travel, you may want to consider staying in a short term rental property. Short term rentals are properties that are available for rent by the night, instead of monthly. This is a great option for vacationers or people visiting tourist destinations. Not only is it more fun than staying in a hotel, but you’ll also have more space and privacy. And since they’re only paying for the nights you stay, it can be more flexible than monthly rent.

If you’re interested in investing in short term rental properties, there are a few things to keep in mind. First, you’ll need to research the local market and regulations. And second, since you’ll likely be dealing with multiple tenants, it’s important to have systems and strategies in place to manage the property effectively. But if you’re willing to put in the work, owning a short term rental property can be a great way to generate additional rental income from your real estate.

10.) Property Tax Lien Investing

Property tax lien investing is a real estate investment strategy where investors purchase the rights to delinquent property taxes. When a homeowner falls behind on their property taxes, the municipality will place a lien on the property. The lien gives the municipality the right to foreclosure on the property if the taxes are not paid. As an investor, you can purchase the property tax liens from the municipality. If the homeowner does not pay their delinquent taxes, you have the right to foreclose on the property.

Property tax lien investing is a great way of attaining investment properties because it gives you a chance to purchase investment properties at a discount. In many cases, you can purchase the liens for pennies on the dollar. You also have a relatively low level of risk because you are accumulating real estate assets typically well under market value. If you do your homework and diligently seek out these opportunities, you can generate a healthy return on your investment. This is a more advanced method of real estate investing which requires patience, experience and may not be the best option for the beginner.

11.) REIT – Real Estate Investment Trust

Real estate investment trusts (REITs) are a type of investment that allows you to pool your money with other investors to purchase real estate. REITs can be a great way to diversify your investment portfolio and get exposure to the real estate industry without having to directly own or manage real estate property.

Real Estate Investment Trusts typically specialize in a particular type of real estate, such as office buildings, shopping malls, warehouses, or apartments, and they may be focused on a specific geographic region. One of the main benefits of investing in REITs is there is potential for high returns without a lot of heavy lifting. However, like all investments, there is also some risk involved. Before investing in REITs, it’s important to do your research and understand the risks and rewards associated with this type of investment.

12.) REIG – Real Estate Investment Group

If you’re looking for a passive real estate investing option, you may want to consider a real estate investment group (REIG). A REIG is a company that owns and manages real estate properties on behalf of its investors. It is similar to a real estate investment trust with some differences.

Investors in Real Estate Investment Groups can earn income from dividends paid out by the company, as well as from the appreciation of the underlying real estate assets. REIGs typically focus on a specific real estate sector, such as office buildings, retail centers, or apartments. As with any investment, it’s important to do your homework before investing in a REIG. Make sure you understand the company’s investment strategy and objectives, as well as the risks involved.

13.) Multi-Family Rentals

Multi family real estate investing is a real estate business that involves the purchase, ownership, management, and/or operation of income producing properties with two or more units. The purpose of multi-family real estate investing is to generate a profit from the sale of the property, or from the monthly rental income generated by the property.

There are many different types of multi-family real estate investments, such as apartment buildings, duplexes, triplexes, and quadplexes. Multi-family real estate investors may also choose to invest in mobile home parks, storage units, office buildings, and other types of real estate. With all the additional units it may be advantageous to look into hiring a property management company.

14.) Commercial Real Estate Property

Commercial real estate investing can be a great way to create long-term wealth. But what exactly is commercial real estate? Commercial real estate consists of the sale, lease, or use of the physical real estate for business purposes. This can include office buildings, retail space, warehouses, and more.

So, what are some key takeaways when it comes to commercial real estate? First, commercial real estate developers are key players in this industry. They buy, develop, and sell commercial properties. Second, demand for commercial real estate is driven by businesses, not by individuals. This means that the key to success in this industry is understanding the needs of businesses and finding properties that fit those needs. Finally, commercial real estate is all about location. The right location can be the difference between a successful investment and a flop. So, if you’re thinking about investing in commercial real estate, make sure you do your homework on the location first.

15.) Owner Financing

Owner Financing is one of the real estate investing strategies and refers to when the seller of a property agrees to provide financing to the buyer. This type of financing can be a good option for buyers who may not otherwise qualify for traditional bank financing. It can also be a good way to purchase undervalued properties.

There are a few things to keep in mind if you’re considering owner financing as an option for your next real estate investment. First, it’s important to have a clear understanding of the terms of the loan agreement. Make sure you understand all of the fees, interest rates, and repayment schedule before you agree to anything.

Secondly, it’s important to remember that you’ll be taking on extra risk by assuming the role of a lender. If the buyer defaults on the loan, you’ll be responsible for repaying it yourself. Owner financing can be a great option for real estate investors, but it’s important to understand the risks involved before you agree to anything.

16.) Sub-to or Subject to Investment Strategy

When it comes to real estate investment strategies, “subject to” or “sub-to” deals are becoming more commonplace and Pace Mortby is among those leading the spear of the charge.

In a nutshell, these deals involve the investor taking over the payments on a property that is already owned by someone else. The advantage of this approach is that it allows investors to get involved in real estate markets without having to put up a lot of money for a down payment. Best of all, if the market turns around and the property increases in value, the investor will be in a great position to reap the rewards.

Of course, there is always some risk involved in any real estate investment, but those who are willing to take on a little bit of risk may find that sub-to deals are some of the best real estate investments out there. The residential real estate market is pissble in a downturn, now may be the perfect time to start looking for sub-to deals. Who knows – you might just find yourself sitting on a goldmine when the market does turn around!

17.) Private Money Investing

Real estate investing can be a great way to build wealth, but it’s not always easy to get started. One of the key decisions you’ll need to make is whether to use private money or debt. Each option has its own advantages and disadvantages, so it’s important to understand when each one is best.

Private money is usually best for experienced investors who have a good track record and can secure favorable terms. The downside is that it can be more expensive in the long run and you may have to give up some control over your investment. Real estate debt, on the other hand, is often better for beginners because it’s more affordable and gives you more flexibility. The downside is that it can be riskier, especially if you’re not sure what you’re doing. Ultimately, the best strategy is to talk to a financial advisor and figure out what makes the most sense for your unique situation.

18.) Hard Money Investing

Real estate industry experts generally agree that there are several real estate investing strategies that can be interesting and worth pursuing. One such strategy is to utilize hard money. Hard money can be defined as real estate financing secured by real property collateralized by the real property’s market value. In other words, when an investor uses hard money, they are using the market value of the property being financed as security for the loan.

There are a couple of different scenarios in which utilizing hard money can be optimal for real estate investors. The first scenario is when an investor wants to buy a property but doesn’t have enough money to cover the entire purchase price. In this case, the investor can use hard money to finance the purchase of the property. The second scenario in which hard money can be useful is when an investor wants to buy a distressed property. Properties that are in disrepair or otherwise not up to par often sell for significantly less than their market value. This presents an opportunity for investors who are looking to buy low and sell high. In order to do this, they can again utilize hard money to finance the purchase of the property.

So, when is it not a good idea to use hard money? Well, one downside of hard money is that it tends to be more expensive than other types of financing. This is because lenders perceive hard money loans as being more risky than other types of loans. As a result, investors should only use hard money when they are confident that they will be able to quickly sell the property or otherwise turn a profit. Otherwise, they may find themselves saddled with a high-interest loan and a property that isn’t worth very much.

Utilizing hard money can be a great way for real estate investors to finance interesting real estate deals. However, it’s important to make sure that the costs associated with hard money don’t outweigh the potential benefits of the deal.

19.) 1% Rule

The 1% rule is a real estate investment strategy that dictates that an investor should only purchase a property if the monthly rental income is equal to or greater than 1% of the purchase price.

For example, if a property is purchased for $100,000, the monthly rental income should be at least $1,000. This strategy is designed to create a passive income stream that will cover the costs of owning the property and provide a small profit.

Over time, the goal is to see capital appreciation in the property value, which will lead to an even higher return on investment. While the 1% rule is not a guaranteed path to success, it can be a useful tool for investors who are looking to create a passive income stream from real estate.

20.) Build Your Own Team

Real estate investing is a business, and like any business, it requires a team of professionals to be successful. While some investors try to go it alone, the truth is that partnerships are key to success in this business. By working with experienced professionals, you can gain access to the knowledge and resources you need to achieve your investment goals.

One of the most important members of your team is a property manager. A good property manager can help you keep your properties in good condition, liaise with tenants, and handle all the day-to-day details of running a rental business. Handymen and contractors can also be invaluable members of your team, helping you to keep costs down by handling repairs and maintenance tasks quickly and efficiently.

If you’re thinking of buying properties to flip or rent out, real estate agents can be a great source of deals. By working with an experienced agent who knows the local market, you can make sure you’re getting the best possible price on each property. Wholesalers can also be a good source of properties, as they often have access to deeply discounted off-market listings.

Of course, no real estate investing team would be complete without lenders. Traditional lenders such as banks can provide financing for your purchase, while private money lenders can offer more flexible terms for investors who are willing to pay higher interest rates. Hard money lenders are another option, although they typically only lend on properties that have been purchased outright. No matter what type of lender you work with, make sure you understand the terms of the loan before signing on the dotted line.

As you can see, there are a lot of different professionals that can be part of your real estate investing team. By carefully selecting partners who complement your skills and business strategies, you can put yourself in a strong position for success.

21.) Out of State

Real estate investing out of state, or out of your own area is a great way to build wealth and generate passive income, but it’s certainly harder and more complicated than investing locally. If you’re thinking about building a remote or out of state real estate business, there are a few things you need to know to be successful.

First, you’ll need to find the right real estate business partners. Look for contractors who share your investment philosophy and who you can trust to help you navigate the market. Second, you’ll need to build a strong team of professionals who can help you with every aspect of your business, from finding properties to managing them.

Finally, you’ll need to create a passive investment strategy that will allow you to reap the benefits of real estate without having to put in long hours. Probably the best thing about investing out of state is that it forces you to not be as involved personally with the business and rely more heavily upon others. By following these steps, you can build a successful real estate business that will provide you with financial security for years to come.

Frequently Asked Questions

1.) What real estate strategy is the easiest to start with?

Real estate investing can seem like a daunting task, but there are several strategies that even beginners can take advantage of.

House hacking, for example, is a great way to get started in real estate while also saving on your own living expenses. The concept is simple – you purchase a property with multiple units and live in one unit while renting out the others. This allows you to offset your own living costs while also generating income from your tenants.

Another strategy that beginners often find success with is wholesaling. This strategy utilizes finding a property under market value, getting the property under contract and then flipping the contract to another investor for a profit. If you’re willing to put in a little bit of work, fix and flipping houses can also be a great way to make money in real estate.

And for those who are looking for a more passive approach, the live-in flipper strategy may be a good fit. This involves purchasing a property, renovating it, and then selling it for a profit – all while living in the house during the renovation process. No matter what your goals are, there is sure to be a real estate strategy that fits your needs. And with a little bit of research, you can be well on your way to success in the world of real estate investing.

2.) Which real estate strategy makes the most money?

Wholesaling is one of the quickest and most profitable real estate strategies. Wholesalers find an undervalued property, then negotiate a contract with the owner. They then sell the contract to another investor who completes the purchase. Wholesalers typically make a profit of around 10%, and the whole process can be completed in a matter of weeks.

Fix and flipping is another popular strategy, but it requires more time and effort. Investors purchase a property, then make repairs and renovations. The goal is to increase the value of the property, then sell it for a profit. This strategy can be very profitable, but it requires significant up-front capital and a good understanding of the local market.

Short term rentals are a great way to generate steady income from an investment property. Investors purchase a property and then list it on short-term rental platforms like Airbnb. Guests stay for a few days or weeks, and investors collect nightly rates. This strategy can be profitable, but it requires regular upkeep and marketing to ensure that the property is rented consistently.

3.) Is investing in real estate still a good idea in 2022?

Real estate investing has always been a solid method of investing throughout the years. Compared to the stock market, real estate is an asset class that you can physically see and manage.

Right now, there are historically low interest rates, which means you can get more bang for your buck when you invest in real estate.

In addition, as the population continues to grow, the demand for housing will continue to increase, making real estate a safe bet for the future. Of course, there are always risks involved in any investment, but if you do your research and work with experienced professionals, investing in real estate can potentially be a less risky way for you to invest.

What Is the best Real Estate Investing Strategy for Beginners?

Real Estate investing is a great way to make money and build wealth. However, it’s important to choose the right strategy based on your goals and experience.

For beginners, wholesaling is often the best option. It doesn’t require any of your own funds and you can find other investors to buy the deals.

Private money can also be used if you wish to keep the property you’re self. Or, If you’re looking for a more passive investment, you can consider buying and holding the property and becoming a landlord. There are many different Real Estate investing strategies out there so it’s important to do your research and choose the one that’s right for you. These are some ideas to help you decide which method of investing that interests you most.

How Can Real Estate Investing Strategies Benefit You?

Real estate investing can provide many benefits, depending on what your goals are. For example, if you’re looking for financial freedom, investing in real estate can help you build wealth over time.

In addition, if you’re looking for time freedom, investing in rental properties can provide a passive income stream that can give you more free time. Regardless of your goals, there are real estate investing strategies that can help you achieve them. If you’re looking to get started in real estate investing, be sure to do your research and develop a plan that fits your needs.

Real estate investing can be a great way to build wealth and achieve financial freedom, but it’s important to do it in a way that makes sense for you.

Conclusion

Real estate investing can provide you with the financial freedom we all desire. By investing in real estate, you can build equity that can be used to fund your retirement or other financial goals. Additionally, real estate investing can provide you with the time freedom you desire by generating passive income.

Don’t get me wrong, passive income isn’t always as passive as everyone is hoping for. However, it can allow you to live the life you want after putting a good few years of hard work into it. Real estate investing is a powerful tool that can help you achieve your financial and time freedom goals.