This article was originally published on October 13, 2017.

Real estate may have produced more wealth than any other industry, but people remain skeptical about joining the fray. Most think they should start with some capital, but that’s not always the case. One magic power you need is to be able to find money and we often don’t say much to open a Deposit account. If you know what you’re doing, you can make money in real estate even if you’re just starting out.

Don’t think so? Take the story of Kent Clothier, for example. Clothier opened his first escrow for $500. All he did was find a distressed home and a motivated buyer and brought them together. Today, he flips over 1,000 properties and manages 5,000 through his company. Graziosi grew up in a trailer park. He lived in a bathroom for a year with his dad when he was 12 years old. He had no advantages. No startup capital. No help from anyone. But somehow, he managed to make money in real estate and owns well over 400 properties in his portfolio today. There are plenty of other examples of this as well. The point? You don’t need a lot of starting capital to make money in the real estate industry. But you do need the knowledge and the know-how.

Most people think it is easier to make money online than to make serious coins in real estate. But both are difficult if you don’t know what you’re doing. When you get to the ground and understand the way forward, you can take steps.

Here’s what you don’t need to generate income in the real estate market.

You don’t need credit: Even if you have bad credit, there are ways forward if you’ve committed enough. Some of the methods discussed in this part do not rely on credit whatsoever. In fact, many successful real estate investors have started without credit or even bad credit. 

You don’t need significant capital: you don’t need capital to make money in real estate for a few hundred dollars to open a Deposit account. Of course, this means going for cheaper homes or distressed properties and flipping contracts. It also means finding hard money lenders or other investors who can help you push deals through. It can even be applied to home repairs as long as you are good at finding money. 

You don’t need large assets: there Is another misconception that you need to place major assets in order to secure a contract or buy a piece of property. You don’t have to do that, but you have to understand how creative funding works. Most people just stop dead in their tracks because they have this belief about what they need in order to get started. 

Related: 10 lessons this entrepreneur learned from Flipping $ 100 million into real estate

When it comes to real estate income, there Are two ways to generate cash. You can generate passive income by buying and holding, while you can generate active income by flipping contracts, making repairs or adding value in another area – such as putting together real estate development deals. It may seem overwhelming at first, but it won’t be as intimidating once you get the experience. 

When most people think about making money in the real estate sector, they ask the following types of questions: 

How can I invest in real estate without money? You can use a variety of methods that include any of the following: 

How does real estate investment work? Investing in real estate works on the concept of cash flow, which means that your income should exceed your outgoing expenses. This is called positive cash flow. This can work for both long-term residential and commercial rentals, and it will also work for short-term vacation rentals. 

Is it good to invest in real estate? Absolutely. This is one of the sources (aside from being a business owner) that has generated the greatest wealth in our history. 

That being said, there Are eight main strategies for generating real estate income. Whether you can get passive income or active income depends on the strategy you implement. 

Related: 8 ways to make Your smart investment

One of the most common methods of making money in real estate is the use of long-term rental housing. People will always need a place to live, which means that they will be engaged in renting real estate. You have to do a proper amount of due diligence on your property while keeping three principles in your mind: location, location, location.

If, for example, the real estate market rises significantly, you can buy this property at a discount. You could also potentially turn around and sell your rights to that purchase to someone else. A clear bet here in a bullish real estate market. As long as it is an option that you can exercise rather than something in stone that says you should buy at the end of the lease regardless, then you could very well turn a profit.

The culture of fixation and Salpa exploded. Thanks to the popularity of home renovation shows, we are experiencing a massive boom in the traditional flip renovation market. While there can certainly be a lot of money to be had here, navigating these waters in the beginning can be tricky. When you lack knowledge or experience, you can find yourself on the losing end if you don’t pick the right house.

Matt Larson has flipped more than 2,000 homes in Iowa and Illinois. During this time, he learned some lessons about what to look for and what not to look for, when to leaf through houses with repairs. His advice? Go after the ugliest houses in the most beautiful neighborhoods. That’s where the real value is. The other difficulty here is not only finding these homes when you don’t network very well with real estate agents, but also understanding your post-renovation value.

How much will the house cost once you’ve invested in fixes and repairs? To pinpoint this, you need a strong relationship with the General contractor and on-site tour property. When buying a site invisible at auction it may seem tempting, if you really know what you are doing, you may lose money. However, making money on a home repair flip can be quite simple – as long as you understand the basic costs and potential value.

John and Julie Wakefield, husband and wife flipping teams that have already done hundreds of flips, say something similar. They advise against biting off more than you can chew, and more importantly, you should look for creative ways to help others. Success as a real estate investor has as much to do with how creatively you can solve problems as it does with how well you can crunch numbers. 

Related: Buy a rental property before the end of the year: Why and how

One way that you can make money from real estate without having to put up very much capital or credit is to flip contracts. All you have to do is find a troubled seller and a motivated buyer and then bring them together. While finding a problem seller may seem difficult, Clothier has systematized the entire process for doing so. The trick with contract flipping is to identify the problem seller and find a ready-to-go buyer.

By combining these parts together, you cut the need to go on a hunt for a buyer after you have signed a contract. This situation is fraught with great risk. Instead, by placing sellers and buyers in advance, you can easily conclude a contract with the confidence that you will not be stuck having to close a Deposit account on the property. 

To do this, you should be able to identify either vacant homes or homes that are behind on their mortgages. That’s the hard part. You are effectively trying to find problem sellers, but homes that are already vacant are primed for opportunities like this. 

Short sales occur when the current owner of their home falls behind on their mortgage, but the property has not yet entered foreclosure. For this to happen, all parties must agree to the deal as the property is currently sold for less than what is owed on existing mortgages. This can be a great opportunity to make a quick profit without investing in lengthy repairs.

However, success with short sales or any other default auctions is often difficult. You usually have to pay for the house directly in cash, and sometimes it has to happen on the site invisible. Short sales are better than auctions because you get to check out homes and enter the negotiation process. If you are an experienced investor, jumping in without inspection and a full review can be risky.

Short sales take time, but they can be well worth the wait. The potential return on a short sale can be instantaneous. Tens of thousands to hundreds of thousands of dollars can materialize once a property purchase goes through because the Bank is covered by a bad investment. But don’t expect to get the property stolen – you’ll still have to negotiate a relatively fair price. Depending on how badly the Bank wants to offload this property, it can sit and wait for another buyer, so don’t try to low ball too far.

Related: “for sale by owner”: the benefits of DIY real Estate

Vacation rentals can present a lucrative path to profit in the real estate market. Not only can you make some side hustle income from vacation rentals, but you could potentially make a significant amount of money and create a substantial stream of passive income if you are in a high-trade tourist area. Places like Los Angles, Miami and other tourist hotspots are well known for having high demand for these short-term rentals.

I have long been a firm believer in the holiday rental market. The best part? You don’t even need to own properties to make money. Some of the world’s most successful property management companies that specialize in vacation rentals do not actually own homes but provide a high-end consumer experience.

How do you participate? Use existing relationships with owners in your area. Network with others. Create bonds. Create a system. To provide satisfaction. Go over and beyond for those who are in the homes you manage. And see how you can help take some of the time and stress out of existing owners of existing rental businesses. If you own a property, list it on a site like Airbnb, HomeAway or FlipKey before managing a vacation rental for other owners.

Hard money lenders provide short-term loans to people who are not normally eligible for these loans. In order to participate in lending hard money, you will need some capital behind you. These are loans that are often at high interest rates because they are for very short periods. To close your first deal, you could turn to a hard money lender. If you have what you feel is a “sure thing” but lack capital, this may be your best bet.

You can also become a hard money lender, but you will need some capital. This probably won’t be the first way you start making money in real estate, but as you build your network, capital and a solid portfolio of deals, you could provide these bridge loans and make a large rate of return.

Even if you don’t have a huge amount of capital, as long as you can successfully identify the right trades, secure a small amount of money and generate a high level of success, you can probably find investors to come on Board without much difficulty. Interest rates make sense here. There’s more risk, but also more reward. This can be a way to keep your cash fairly liquid and generate good returns in the short term without having to wait years and years for those returns to materialize.

One of the great opportunities in real estate to make a significant amount of money is to invest in commercial real estate. Commercial real estate developers focus not only on flipping properties but also on their development, increasing the value of the property in order to increase their net income through renovations and upgrades. They also consult on projects that may take more experienced property investors to see to implement.

Ali Safavid, founder of 5209 Investments, says commercial real estate is one of the most lucrative sources of both revenue and profit in the real estate market. As long as you can find ways to add value to an exchange, investing in commercial real estate can be one of the largest income generators you will find.

People always need office space and retail to run their business. These physical places are bread and butter in the real estate niche. As you grow, you can find ways to open shopping malls, develop large-scale buildings, and more. But you have to start somewhere.

Entrepreneur Media, Inc values your privacy. In order to understand how people use our site in General, and to create a more valuable experience for you, we may collect data about your use of this site (both directly and through our partners). The table below describes the data collected in more detail. By giving your consent below, you consent to the use of this data. For more information about our data policies, please visit our Cookie policy.