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How To Make
Money In Real Estate Investing
Have you ever wanted to know how to make money in real
estate investing? It all starts with having a basic
understanding of real estate investing and I'd recommend
starting with "Real
Estate Magic 101 - How To Get Rich In Real Estate Even If You're
Dead Broke!" This book is an introduction to real estate
investing like no other and after one reading you'll know more
than 95% of the real estate investors and Realtors in the
marketplace.
Let's go through the number of ways you can make money as a
real estate investor. By no means is this a complete list but
it will open your eyes to the possibilities that exist.
- How To Make Money In Real Estate Investing - Method 1
Rental Properties. This is the tried and true way to become
wealthy as a real estate investor. Although the thought of being
a landlord does not appeal to most the simple strategy of buying
houses that have a positive cash flow where the tenants are
making the payments for you is a slow and steadfast way to get
rich over time.
As a professional real estate investor I encourage you to only
purchase properties that have a positive cash flow after taking
into account hiring a property manager and accounting for all
expenses including, taxes, vacancy, misc repairs and upkeep,
etc.
- How To Make Money In Real Estate Investing - Method 2
Wholesaling. Wholesaling is the process of learning how to
purchase properties at a significant discount. Most use the
term wholesaling (or flipping) to indicate they are buying and
selling the property in a short period of time to generate a
quick profit.
The best part is that wholesaling
properties can provide fast cash for your bank account but does
not require any of your own cash or credit. When you learn how
to buy a property at wholesale prices, you will find that there
are an abundance of investors that will be all too happy to
purchase the house from you and in the process you will be paid
very well for your knowledge and time.
- How To Make Money In Real Estate Investing - Method 3
Rehabbing. Rehabbing houses can make a lot
of money and it all starts with buying the property wholesale.
From there, you will want to get the property fixed up in the
shortest amount of time possible so you can resell the property
for profit. The good news is that we commonly see profits of
$20,000 and a whole lot more from rehabbing houses. Some people
will choose to rehab two or three houses a year while others
will rehab several per month. The choice is yours.
- How To Make Money In Real Estate Investing - Method 3
Subject To. One of my favorite ways to
purchase property is by taking over existing debt on a house
without having to qualify for a new loan. Using “subject to,”
you can literally just step in and take over someone’s payments
on a house. No qualifying, no credit checks, and no money out
of your pocket.
“Subject to” is the term used to denote the
buyer is assuming the existing loan and taking over the loan
“subject to” the existing terms and conditions. But all parties
need to be aware that all loans from financial institutions
contain a “due on sale clause” calling the entire loan due when
the property is sold. FYI: Lenders tend to frown on investors
buying property “subject to.”
- How To Make Money In Real Estate Investing - Method 4
Lease Options. When you own a property it
might be advantageous for you to sell the property to a
prospective tenant/buyer on a lease option. The benefits
include: 1) you receive option money – this is a fee paid buy
the tenant/buyer for having the “option” to purchase the price,
2) the tenant/buyer has time to qualify or repair their credit
to allow the home purchase, 3) you can structure the lease
option where the tenant/buyer is responsible for the repairs,
maintenance, and upkeep of the property, 4) larger pool of
prospective tenant buyers, 5) you are able to get a higher than
market sales price, 6) tax advantages until tenant exercises the
option, 7) only about 1/3 of the lease options you give to
buyers will be exercised.
Lease Options can also be used if you want
to purchase properties. Many investors will lease a property
from the owner with the right to purchase it for a fixed
amount. If you are going to use this strategy to control
properties you must include in your lease option that you have
the right to sublet the property. Although I am not a big fan of
an investor using a lease option to purchase properties I
include here because it is an option.
- How To Make Money In Real Estate Investing - Method 5
Pre-Foreclosures. For many, the word
foreclosure has a negative connotation. People think that the
house is in bad condition and that the folks who lived in it
were horrible people but more times than not, that’s not the
case. Usually, the owners just fell on hard times and the houses
actually are in decent shape.
Pre-foreclosures are the most profitable
segment of residential real estate investing. Properties can be
purchased wholesale, subject to, with owner terms, or by
negotiating a discount with the lender (AKA short sale).
Pre-foreclosures are probably not the best
place for a new investor to start looking for deals. Why?
Because Pre-foreclosures are the most competitive segment of
real estate investing.
- How To Make Money In Real Estate Investing - Method 6
Tax Deeds. A Tax Deed is a legal deed
conveying title and ownership of a property to the purchaser.
They are usually purchased at a public auction after property
owners have been delinquent in paying their taxes. County Tax
Collectors foreclose and offer the property to the highest
bidder.
Tax Deeds offer high profit potentials but
the process involved in determining which property to safely buy
is tedious and time consuming. It is generally safe, however you
must know what you are doing.
Purchasing Tax Deeds at public auctions has
become popular and highly competitive. Tax Deeds are currently
offered as a prime source of revenue for County governments in
22 States. The other 28 States use Tax Lien Certificates.
- How To Make Money In Real Estate Investing - Method 7
Discounted Paper. Often called “note buying” this is when
notes and mortgages are purchased at less than the face value of
the loan. For example buying a $100,000 note for $75,000. When
purchasing notes the investor is looking for a specific yield
and may be happy to receive their payments over time or if the
note goes into default they can foreclose on the property.
- How To Make Money In Real Estate Investing - Method 1
Private Money Lending. Private money lenders are looking for
ways to have their capital work for them and produce an
acceptable return on their investment. For instance if you had
$100,000 in the bank and you were earning 3% for a return it
could be to your benefit to become a private money lender and
loan your money out at a much higher interest rate. Not only
are you earning a much higher return on your investment but the
loan is secured by real estate so if the borrower goes into
default you can foreclose and take possession of the property.
Real estate investing offers a broad range of opportunities
for investors of all levels. The key to becoming successful is
becoming knowledgeable about the type of investing you wish to
specialize in and taking action.
To
learn more about real estate investing start with "Real
Estate Magic 101 - How To Get Rich In Real Estate Even If You're
Dead Broke!" or
Kick Ass Wholesaling
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