Investment in real estate is the purchasing, holding and maintaining of a property for the sake of receiving a rental income or to sell the property for a profit at a later date. It’s undoubtedly a smart idea because real estate provides a rare combination of stability, steady cash flow, and high capital gains. You may earn less than investing in the stock market at its peak, but you do not risk losing everything. Therefore, it is a low-risk investment with good cash flow and steady profits and returns.
But how can someone invest in real estate if the person has no money or very little of it?
It is the main question we are going to answer today. Let’s point out the different ways of investing in real estate with little or no money!
Can a bank help you to invest in real estate?
Yes, banks help investors to invest in real estate, but it is always tricky for those who do not have enough cash reserves to apply for a bank loan.
It is relatively tough to qualify for a personal loan through commercial banks if you have applied for a large amount of money in proportion to your net worth and/or income.
Now suppose that you are trapped, like many of us, in such a dire situation. What should you do in the case? You want to invest in real estate but have very little savings and do not qualify for a loan due to insufficient personal cash reserves or because you cannot afford the downpayment.
So, what is the solution if the bank won’t help?
Don’t worry, with the invention of the internet, it is possible to invest in real estate through middleman companies with minimal funds. These companies allow you to invest in many real estate developments, large or small, regardless of your budget.
I recommend going with the two most prominent leaders of the industry that are both safe and reliable: Solomartel or Cardone capital.
Which one is better, Solomartel or Cardone Capital?
After having invested with both companies during this past year, I reached the point where I can tell both companies’ pros and cons so that you can easily choose whichever suits you best! Let’s explore both of these companies together and conclude which one would suit you best.
Owned by the famous billionaire Grant Cardone, this company has been around longer than Solomartel but it works only in the United States. You can register as an accredited investor or non-accredited investor; the latter, however, has certain limitations regarding their investment options on the platform. To start investing with Cardone capital, you must have at least 1000$ to 5000$ saved up.
How do they work?
Cardone capital finds the properties and negotiates their price and the financing and then closes the deal. The client investing in one of their projects becomes partial owner of that actual project whether he is an accredited or non-accredited investor, the only difference between the two being that the non-accredited investors have less choice regarding the funds they can invest in, certain funds being limited to accredited investors which are usually more profitable.
Cardone capital then rents out the buildings to trusted tenants and collect the rent from them. The distributions are paid out every month to the investors.
The investment market of this company is limited to the southeastern USA where they provide decent investments in the growing economic centers of the area. More information regarding the investment options they provide and FAQs, can be found on their website.
Personal experience of investing with this company:
When I invested in one of their residential complexes in Florida, I faced a certain lack of information on how the risk is managed on their properties, and the returns were also not great. Of course, their 6% yearly returns were definitely far better than what someone would get investing on the stock exchange but greater returns can be made by investing in real estate yourself and greater returns are provided for similar properties by their competition. Other than that, the investment experience was great and the residential complex in Florida in which I have invested was definitely a great investment that I do not regret making.
This company also provides great real estate investment opportunities, they are currently the first enterprise of the industry in terms of overall performance, growth, and returns despite being a little bit younger than Cardone capital.
Solomartel also sells investment products but not stocks or REITs, instead, the profitable investment projects are placed in funds in which the investors can invest through their online platform. By investing in a particular fund, the investor becomes a partial owner of the property within the fund.
Unlike Cardone capital, Solomartel is not limited to a particular market or location and provides investment opportunities across the world with a lower barrier of entry (at around 300 to 800$ depending on the project) and slightly higher returns. They allow investors to invest in different projects worldwide through their minimalistic online platform.
The great thing about this company is their risk management strategy: they make sure to keep a margin between a fund properties’ purchase price and the market value of the properties within the fund, or put simply, the total amount of capital the investors invest in a fund is always significantly lower than the real property market value minimalizing the risk of the investors as properties can be resold at a profit even in the event of a crisis, this safety margin leads to a much lower risk.
Personal experience of investing with this company:
The primary thing that comes to the mind of the investor is for his money not to go to waste and I am no exception to this rule.
When I invested with them, they were quite clear regarding each investment and its potential and the risks involved and how these risks will be managed, alongside similar matters that worry most of us.
The return value was good and slightly higher than on Cardone capital funds. Their safety margin policy provides low-risk or risk-free investment opportunities to investors all around the globe.
Ultimately it is up to you to choose the best option according to your pocket and preferences. Both are good options if you want to invest in real estate with limited funds and both have revolutionized the market and the world of real estate investing.