|Investing in real estate doesn't require the investor to be a Mr. Fix-it, doesn't require a lot of money, but I do believe integrity with the quality of being
honest with strong ethical principles is required. Your word is your bond, protect everyone, put it in writing.
Frustrated, lacking confidence, it's natural. Opening a door to a dark room you wonder what is inside, what dangers are before you. Join a real estate
investment club, network and have contact with experienced investors. Sharing experiences will build your confidence and you will realize taking some
reasonable risks is worthwhile.
Today with the Internet real estate investing is easier, faster, and yes, very profitable. There are tactics and strategies to real estate investing, such terms as
"buy and hold", "flips", "wholesaling", "rehab" seem pretty much self-explanatory, yet they could be a little puzzling to the new investor,
Lets look at wholesaling.
The great thing about wholesaling real estate is that you have limited ownership of the property. There is little risk, and you can do it with little or no
money down. Wholesaling real estate is a strategy used by real estate investors, where a property is put under contract usually with an end buyer ready to
take title and the investor walking away from the closing table money in hand.
Wholesaling real estate provides an opportunity for someone to build income with little capital or credit. All it requires is ambition and some specialized
knowledge. The more ambition you have, the more money you will make. Wholesaling does not require a real estate license. A license is not required to
buy or sell any property that you have an equitable interest in. That interest can be a contractual interest (you have the property under contract) or you
actually own or have title to the property.
Flips can describe both wholesaling and renovations, fixing up, for resale. Simply turning over in a short period of time. Sellers (investors) of lower priced
homes seeking first time home buyers or buyers with limited financial resources need to be aware of FHA or Veteran's home loans. Especially holding
periods before resale, inspection requirements and special financing conditions, lender points, title inspections, escrow, government fees and various other
Buy and Hold is what most people think about when you picture a real estate investor, not a "real estate dealer". You are buying a property letting the
market work for you. Using financial leverage, a down payment controlling the property ownership while making mortgage payments. The greatest share
of these properties are rentals. Using the money received from tenants to pay for the property, taxes, insurance, expenses and override or income for the
The buy and hold is a little bit of a long-term strategy, and this is where you are building for the future and let the forces of the market work for you. A
rental property is a business and as such the government allows the cost of doing business to be deducted from the income prior to paying taxes. When you
work on wages, the income is subject to various taxes with little or no deductions. Payroll taxes, social security, medicare are deducted before you receive
With investment income, dividends from stocks, bonds, and real estate you are allowed various costs of earning the money to be deducted before you are
subject to taxes without the usual payroll tax deductions. What a break! Like the saying goes, it takes money to make money. Plus it is a lot easier if the tax
code is in your favor!
While you are allowed depreciation on the improvements to your real estate property, you also are the beneficiary of appreciation. Property appreciation
is the growth in value of property over a period of time. Economic conditions, population increases putting pressure on the availability of property and
inflation of building costs. Buying and holding is the wealth building phase of your real estate ownership. Warning: There are periods of time like the
recession period that we are just recovering from when property values can "tank", reducing the value of your real estate investment.
Avoiding get-rich-quick schemes, real estate investing isn't an overnight wealth attainment, no work program. Invest when you feel comfortable and expect
planning for the long-term even when one transaction can make you a great deal of money on a quick flip. It's building several of those profitable
transactions that will provide you financial security. Make sure buying property makes financial sense for you. Got that carrot out in front of you, say
you are interested in that first real estate investment, ready to buy, where to start?
Let's sit back and we are in our first few weeks as a licensed real estate agent. What considerations to making money in the profession? Understanding
"marketing" is number one priority. Marketing isn't just putting up a for sale sign on a piece of property.
Marketing is a two way street, One side of the street is the selling, the other side of the street is listing or finding the property for sale. Some agents are
content with a one way street. Looking for buyers, sitting in the office doing "floor time" taking calls from signs on properties for sale, answering ads for
our company's properties for sale. The ambitious agent will schedule an open house and find prospective buyers there.
Actually the second avenue of your marketing program starts right there. Consider the prospect not just as a buyer, but just like a new car buyer they may
have a property that needs to be sold before they can qualify to buy another property. In that case do you have a property trade-in program? Can you
make them a "qualified buyer" clearing them of their existing house?
You should jump at the opportunity to explain the benefits of selling their existing property and being prepared to be in the very best position to make an
offer at the most favorable terms to them on purchasing their new home?
In other words for you, putting the horse before the cart. Taking a listing, putting the property up for sale. Finding a property to market, a listing, then
going about the selling. It is that part of real estate investing that is really the most difficult, finding that investment grade property. Not for a listing but to
buy/invest. Many say the investment profits are made on the purchase, not the sale.
You can enlist the help of a real estate agent to lead you to an investment property, but that may be difficult without a track record with several agents.
There are a lot of wishful thinkers, thinking about investing but never actually buying one. With a little experience a real estate agent knows since it doesn't
cost people they can be wasting a lot of time with people dreaming about finding that "great bargain".
A real estate agent usually has lots of clients looking to buy investment property, and as a novice investor we won't be on the top of the list. How about
looking for an investment property among ads on properties for sale, especially for sale by owners? Is the owner trying to merchandise the property
themselves to save a commission? Well, good luck there. I'm trying to find an owner selling themselves to save the commission myself.
But, really another source of investment property, maybe finding an owner with a small equity and reasons to sell. They owe what the property is worth
and no room for paying sales fees. Lots of legitimate reasons they want to sell without a real estate person. So contact them view the property. If you can,
find out the motivations of the seller. What causes them to want to sell, and how much do they expect to NET from the sale after all costs? Gives you an
idea where to start with any offers and how flexible they will be when it comes to the sales price.
Wait, forgot one of the most important sources of possible investment property leads. Your "bird dogs", friends and family members interested in your
success or at least what you're doing these days. Let the people around you know you are looking for something reasonable in price and terms to buy to fix
up and sell or hold on to for a little rental income. No need to go into a lot of financial details, just let them know about your stepping out into a new
venture and let them work for you. If someone happens to land you that "right property". "The lady around the corner who lost her husband and wants to
move closer to her son." Remember a generous thank you reward that they can point to with pride will introduce you to a lot more "bird dogs" and repay
you with more leads
Disclosure-I am not a CPA, Attorney or Licensed Real Estate Professional, I am not offering advice and encourage the reader to seek out such professional
counsel as needed.
INCOME and EARNINGS DISCLAIMER
ANY EARNINGS OR INCOME STATEMENTS, OR EARNINGS OR INCOME EXAMPLES, ARE ONLY ESTIMATES THERE IS NO
ASSURANCE YOU'LL DO AS WELL. YOU MUST ACCEPT THE RISK OF NOT DOING AS WELL.
NO CLAIMS OR REPRESENTATIONS, AS TO INCOME EARNINGS ON ARE MADE THERE CAN BE NO ASSURANCE THAT ANY PRIOR
SUCCESSES, OR PAST RESULTS, AS TO INCOME EARNINGS, CAN BE USED AS AN INDICATION OF YOUR FUTURE SUCCESS OR
Entering to any contract for purchase or sale of real estate, the reader's Due Diligence including searching out and researching professional opinions are
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