Category: Finance, Real Estate.
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.
Have you ever wanted to know how to make money in real estate investing? Let s go through the number of ways you can make money as a real estate investor. How To Make Money In Real Estate Investing- Method 1. By no means is this a complete list but it will open your eyes to the possibilities that exist. Rental Properties. 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.
This is the tried and true way to become wealthy as a real estate investor. 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, vacancy, taxes, misc repairs and upkeep, etc. Wholesaling. How To Make Money In Real Estate Investing- Method 2. Wholesaling is the process of learning how to purchase properties at a significant discount. 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. 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.
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. Rehabbing. How To Make Money In Real Estate Investing- Method 3. Rehabbing houses can make a lot of money and it all starts with buying the property wholesale. The good news is that we commonly see profits of$ 20, 000 and a whole lot more from rehabbing houses. 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.
Some people will choose to rehab two or three houses a year while others will rehab several per month. How To Make Money In Real Estate Investing- Method 4. The choice is yours. Subject To. Using" subject to, " you can literally just step in and take over someone s payments on a house. 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. No qualifying, and no money, no credit checks 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.
FYI: Lenders tend to frown on investors buying property" subject to. " How To Make Money In Real Estate Investing- Method 5. 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. Lease Options. 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, and upkeep of, maintenance 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. When you own a property it might be advantageous for you to sell the property to a prospective tenant/ buyer on a lease option. Lease Options can also be used if you want to purchase properties. 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.
Many investors will lease a property from the owner with the right to purchase it for a fixed amount. 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. Pre- Foreclosures. How To Make Money In Real Estate Investing- Method 6. For many, the word foreclosure has a negative connotation. Usually, the owners just fell on hard times and the houses actually are in decent shape.
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. Pre- foreclosures are the most profitable segment of residential real estate investing. Pre- foreclosures are probably not the best place for a new investor to start looking for deals. Properties can be purchased wholesale, with owner terms, subject to, or by negotiating a discount with the lender( AKA short sale) . Why? How To Make Money In Real Estate Investing- Method 7. Because Pre- foreclosures are the most competitive segment of real estate investing.
Tax Deeds. They are usually purchased at a public auction after property owners have been delinquent in paying their taxes. A Tax Deed is a legal deed conveying title and ownership of a property to the purchaser. County Tax Collectors foreclose and offer the property to the highest bidder. It is generally safe, however you must know what you are doing. Tax Deeds offer high profit potentials but the process involved in determining which property to safely buy is tedious and time consuming. Purchasing Tax Deeds at public auctions has become popular and highly competitive.
The other 28 States use Tax Lien Certificates. Tax Deeds are currently offered as a prime source of revenue for County governments in 22 States. How To Make Money In Real Estate Investing- Method 8. Often called" note buying" this is when notes and mortgages are purchased at less than the face value of the loan. Discounted Paper. For example buying a$ 100, 000 note for$ 75, 00When 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. Private Money Lending.
How To Make Money In Real Estate Investing- Method 9. Private money lenders are looking for ways to have their capital work for them and produce an acceptable return on their investment. 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. 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. Real estate investing offers a broad range of opportunities for investors of all levels. 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 The key to becoming successful is becoming knowledgeable about the type of investing you wish to specialize in and taking action.
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