How to Start Investing In Real Estate on A Limited Budget

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By Jacob Maslow

Real estate investments are attractive: They are relatively safe (compared to stock market volatility, for example), they provide a steady cash flow (some other investments may yield no dividends for years), and they offer strong odds in favor of capital gains. But is it possible to start investing in real estate on a limited budget?

It is possible to start investing in real estate on a limited budget. Many possibilities exist seller financing, lease options, property syndications, special US Government Schemes, and several other ways, too.

Coming from a background of stock market investing and derivatives trading, I thought that real estate investments are out of my reach because it is so expensive. I was amazed to discover how many ways there are to overcome this challenge. Read on – and I will share some of my discoveries with you!

The Taxpayer’s Money

One of the first discoveries I made, was how many ways taxpayers are willing to make their hard-earned cash available for me to own real estate.

Here we will discuss two potential sources: United States Department of Agriculture (USDA) loans, and Small Business Administration (SBA) loans. (Numerous other opportunities are available. For these, visit the “fortune builders” website referenced below).

The USDA Rural Development Office would like to fill under-populated rural areas – ideally towns with a population of 10,000 or less. To get a bigger picture, this represents only 3% of the USA – 97% is secured. Mortgages have down payments as low as 0%!

The loans are available to low, and moderate-income earners who may otherwise not qualify for mortgages.

To check which areas qualify for this loan, see here:

Read their terms and conditions. Note that these loans are for rural and suburban homeowners.

Another possibility here is to investigate Business Administration loans. Where the USDA loans are for homeowners, the SBA loans are aimed at acquiring commercial property.

The SBA does not lend the money directly but works through other lenders who then require down payments as low as 10% for purchases relating to owner-occupied premises. The SBA 504 loan facility ranges from $100,000 to $20 million.

This money can be used to buy buildings, finance ground-up construction, or improvements.

For more information, you can visit

Real Estate Investment Trust (REIT)

REITs offer the opportunity to invest in real estate – but on the stock market. With over 200 REITs on the stock market, choices are abundant.

But there is more! If you do not want to put all your disposable income in a single REIT, there is another option: the Exchange Traded Fund (ETF).

An ETF is a fund that holds an interest in multiple asset classes, and as such, you may gain exposure to several different companies at the same time. This is important because it spreads your risk over several different entities.

For more information you may want to visit:

Online Real Estate Investing Platform

  • These platforms connect real estate developers to investors who want to finance projects, either through debt or equity.
  • Investors hope to receive monthly or quarterly distributions in exchange for taking on a significant amount of risk and paying a fee to the platform.
  • Like many real estate investments, these are speculative and illiquid — you can’t easily unload them the way you can trade a stock.
  • Alternatives for those who can’t meet the high qualifying criteria of some online investment platforms include Fundraise Realty Mogul.

For more information on this option you can visit:

Seller Financing and Lease Options

Those who are successful in Real Estate Investment tend to agree on one principle: Use someone else’s money to invest.

Seller financing and lease options are mechanisms  (apart from using the Taxpayer’s money) in which you can – in a way – invest in real estate without money of your own.

Seller financing is the opposite process of conventional real estate transactions, where the buyers will provide the sellers with the cash, to gain ownership of the property.

With a purchase money mortgage (or seller financing), the seller extends finances to the buyer. The buyers will then repay the sellers, for the agreed terms.

Lease Options are when the property owner charges the buyer a monthly or yearly premium, in the form of higher rental payments.

The excess rental fee is channeled towards the purchase price, meaning the investor can purchase an investment real estate using a slightly higher rental fee.

Both seller financing and lease options are excellent ways to invest in real estate with no money at all.

Other Options

Many other opportunities to invest in real estate on a limited budget have developed over the years. These include:

  • House hacking. You as property owner live in a part of your house, while you rent out the remaining parts. This way your house becomes an income-generating asset.
  • House flipping: Buy under-valued properties, renovate, and flip them for a higher price. This requires experience, as the turnaround time, while repaying the mortgage at the same time impact directly on your cost and revenue calculations.
  • Airbnb: If you have additional space in your home, a garage apartment, or in-law suite, you could rent that space out as a short-term rental. The additional income could help offset some expenses of homeownership or help pay off any mortgage debt at a faster rate.
  • Property syndication: Also known as private equity partnership is when a group of people “club together” to make a real estate investment. The more members in the club, the lower the individual contribution becomes.
  • Option to buy: Here the buyer takes an option to buy the property, without taking ownership immediately. This makes it possible to either sell the option to a new buyer or to take ownership of the property and then sell it to the new buyer.

Each of these methods requires its research, and it is not recommended that anyone take the plunge before acquiring the necessary skills set associated with a particular approach!


While real estate investment is known as the “ Billionaire’s Ballgame”, those investors with a limited budget are not excluded from real estate investment by any means; opportunities abound!

It does, however, take a bit of research to find the nuggets. The good news is that information is freely and abundantly available. To this end, a few references are provided below.

Happy hunting!


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