On the Holistic Wealth Podcast, I had an opportunity to sit down with Malena Crawford, Author of the bestselling novel, A Fistful of Honey and Founder of the Black Divine Feminine Group, a Facebook group dedicated to empowering Black women with over 70K followers. Malena is also a Certified Holistic WealthTM Consultant (in-progress) with the Keisha Blair Institute on Holistic Wealth. She’s a six-figure Coach and real estate investor, who is passionate about the benefits of real estate investing for empowering women. On the podcast, we discussed tips and strategies for investing in real estate, with little to no money for a down-payment.
Here Are Some Tips and Strategies for Investing in Real Estate:
1. House Hacking
House hacking is a strategy that involves renting out portions of your primary residence to generate income that is used to offset the cost of your mortgage and other expenses associated with your home. This gives you the freedom of using that cash to make a down-payment on another home without having to find new funds elsewhere. Malena recommends an FHA loan to help you do that as well as programs offered by Freddie Mac in the United States.
2. Leverage Your Assets
Malena started out buying her first property at the age of 24. She quickly realized that with the market appreciating that she could leverage the home to get the funds to use as a down-payment on another property. Pulling out equity out of a home to invest in another property is a popular way of getting started in real estate investing. If you have retirement accounts with sufficient funds, you can also assess the option of using a portion of those proceeds. However, its best to speak with your financial advisor before making a decision to use a portion of retirement funds.
3. Get A Partner to Invest With You
Getting a partner to invest in real estate with you is another option for investing when you need extra investment funds. It could be as simply as partnering with a trusted family member or friend to purchase an investment property. More formal structures include a real estate partnership between two entrepreneurs who have decided to work together in a professional environment. This could entail setting up an entity such as a an Limited Liability Company or an S-Corporation (in the United States).
4. Focus on Small Cap Properties
Properties anywhere from $30,000 to $50,000 can provide tremendous opportunities. A down-payment on a small cap property could be just $3K- $5K, making it very accessible to those with limited funds. Do Your research to find these properties. Malena outlined on the podcast that Lisa Phillips, Founder of Affordable Real Estate Investments, has an amazing Facebook group to help women get into the real estate market. Relative to more expensive properties, these properties have the potential for more return on your investment as well as income growth potential.
5. Take Measured Risks
Through the Personal Financial Identity Framework that I developed, Malena was able to take the Personal Financial Identities Quiz, and her results were the Risk-Taker. She indicated that these results were spot-on as she is the first in her family to invest in real estate. As a matter of fact, during the first half of the COVID-Pandemic in May last year, she took the risk and bought a multi-unit investment property that’s now worth much more in value now because of the demand for housing and low inventory.
My book Holistic Wealth: 32 Life Lessons To Help You Find Purpose, Prosperity and Happiness has an entire section on “Building Your Financial Independence Portfolio”, that also includes tips and strategies for real estate investing. In addition, the Institute on Holistic Wealth also offers the Certified Holistic WealthTM Consultant Program to enable you to train others in designing Holistic Wealth Portfolios.https://www.instituteonholisticwealth.com/course/the-personal-financial-identity-course/
Before you start investing in real estate, it’s best to know your own personal financial identity. You can figure out your personal financial identity by taking the free quiz here. There’s also a short course at the Institute on Holistic Wealth to help you harness the strengths of your personal financial identity. If you need one-on one coaching to achieve your goals, schedule a consultation here.
Full transcripts of the podcast are available on the Institute on Holistic Wealth website here. Listen to the full episode to hear all the tips and strategies shared.