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A REIT is a company that owns and operates commercial real estate such as apartment buildings, malls, office buildings, hotels, and warehouses. Investing in a REIT allows you to earn a share of the income produced by these commercial buildings. You can purchase shares in a REIT from a stockbroker. To avoid fraud, stick with publicly-traded shares, listed on a major stock exchange and regulated by the Securities and Exchange Commission (SEC). Purchase rental properties that generate revenue for you every month. You can manage the properties yourself, or you can use a real estate team to fill vacancies and hire a property manager to take care of the property. You can purchase fixer-uppers, hire a contractor to repair them, and then find tenants. Alternatively, you can purchase turn-key properties that are already repaired and already rented. You can lend money to other investors who need capital to purchase or repair property. Secure the loan with a Deed of Trust. This means that legal title of the property is transferred to trustee, or a neutral third party, who holds the property in as security for the loan. You can earn as much as 15 percent interest on these loans. Mortgage companies sell mortgage notes to investors, usually as mortgage-backed securities. They can be performing or non-performing notes. Performing notes are those on which the borrowers are making payments. If the borrower is behind on payments it becomes a non-performing note. If you buy non-performing notes, you can usually purchase the loan for a fraction of its original value. Then, you have the option of offering a loan modification, allowing a short sale, which means selling the property for less than debts still owed on it, or foreclosing on the loan. Whichever option you choose, you stand to make money because of the discount you got when you purchased the note.
Purchase shares in real estate investment trust (REIT). Become a landlord. Lend private money to other investors. Invest in loans or notes.