Many first time investors who are looking to get their feet wet decide to go for residential properties. There are several reasons why this is a great way to start. First, if you invest in small, run-down properties to fix up for a profit, you can often find them for relatively cheap compared to other types of real estate available, especially if they are obtained through a government rehabilitation program or auction. If someone needs to get rid of the property, then you are likely to get a great deal.

Once you get the hang of being a real estate investor through these types of properties, and have figured out what financing options are best for you while making a substantial profit, you may decide to move up to rehabilitating larger, more expensive properties or start to invest in commercial real estate.

No matter what your future plans are, starting in small residential real estate is a great way to learn the ropes of the trade so you don’t waste a lot of time and money on properties that take skill to finance and manage.