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Beginners Real Estate Investing Guide
Real Estate Investing - Ask
Questions Before Making an Investment
First Time Real Estate
Investor
Real Estate Investing - Planning
Your Investment Strategy
How to Find Real Estate
Investment Properties
Getting a Professional Home
Inspection
Large Profits From Inexpensive
Real Estate Repairs
Real Estate Investing - Costs
and Fees
Real Estate Insurance
and Risk Management
Real Estate Investment Risk
Part 1
Real Estate Investment Risk
Part 2
Getting The Best Return For
Your Investment
Creative Financing
For Real Estate Investors
Real Estate Investment Tax
Considerations
Real Estate Rental Properties
- Great Investment or Nightmare
Real Estate Foreclosures - Great
Deal or Headache
Flipping Real Estate for Profits
Slow Return On Real Estate
Investments
Negotiating for the Best Possible Real Estate
Deals
Real Estate - A Time to Buy and a Time
to Sell
Creating Your Real Estate
Investment Strategy
Investing and Growing
Your Real Estate Portfolio
Commercial Real Estate
Investing
Real Estate Marketing
Understanding Real Estate Law
Do You Need An Real Estate Agent?
What The Real Estate Mortgage
Lender Sees
Do You Have A Career In Real
Estate?
Rural or Urban Real Estate
Investments?
Real Estate Investing on the
Internet
Real Estate Investing
- Property or Paper? |
Real Estate Investing - Introduction
Real Estate Investments
There's gold in properties. It's not buried in the ground either - it's sitting
on top of it. Real estate investment is the most lucrative type of investment
that there is - no matter what the overall real estate market is doing. The
objective is to buy low, and sell high - regardless of what is going on with
the market.
A common mistake that newer real estate investors make is that they go ahead
and buy high, and expect the market value to rise. Suddenly, the price drops,
and they owe a great deal of money, without any hope of recouping their losses.
You don't want to make this mistake. Your golden rule is to always buy low.
Obviously, if you were selling a property, you would wait for a buyer that
is willing to pay you the market value of that property. So, how can you
expect to find a seller that is willing to take less than market value? It's
a great deal easier than you might imagine.
First, let's take a closer look at the property. If the property needs
improvements and repairs, you can get it for less than what it's market value
will be after you make those improvements and repairs. Some properties only
require three or four thousand dollars worth of improvements, and can be
ready to place back on the market in a matter of weeks.
Let's assume that you find a property with a $100,000 price tag. You've done
your research, and you know that by investing an additional $6000 in
improvements, the value of the property will rise up to $150,000. $150,000,
minus your $100,000 buying price, minus the $6000 'fix up' investment - your
profit turns out to be $44,000. This is more than a lot of people make in
a year, and you made it in a matter of a month or two.
A good real estate investor is very careful about what they spend when they
are making changes to a property to get it ready for the market. Usually,
they will only perform cosmetic changes: new paint, new carpet, landscaping,
and things of this nature.
Most real estate investors purchase two or three bedroom homes when they
start out. The demand for homes of this size is usually high, so they are
easier to sell again. They also strive to buy in neighborhoods that are kept
up, but not overly kept up. There is a mid level neighborhood that investors
seek. Neighborhoods where there are kids playing in the yards are ideal.
Good investors also seek properties that are listed at approximately 60%
up to 75% of the market value. They never, ever purchase a property that
is selling at it's market value, because there is no profit in that. For
example, the investor would not purchase a property valued at $75,000 for
$75,000. But he would purchase a property that was valued at $100,000 for
$75,000.
A great deal of time can be spent seeking homes that meet your specifications,
but you will save time by using a qualified real estate agent. They will
do the work for you, and call you when there is something for you to see.
You don't have to hide the fact that you are an investor. Be honest about
that. You only need an agent, however, to find the properties for you. You
most likely won't need one to resell the property.
Many investors work within niches. For example, instead of just seeking homes
that are for sale that need cosmetic changes, they may instead only seek
out properties that are about to be foreclosed on. They may seek properties
that are being sold for back taxes. They also have different types of investing.
For example, an investor may purchase a property with the intent of quickly
reselling it for a profit, or he may invest in a property with the intention
of renting it out for the long term.
If you are interested in investing in property, with the intention of renting
it out, make sure that you are fully aware of all of the costs of maintaining
the property, so that you can be sure that the rent you collect covers those
costs, and still leaves you a profit. Otherwise, it isn't worth it. If a
property is going to cost you $900 to maintain, including any mortgage payments
and insurance, but the current economic conditions in the area can only support
$600 for rent, this is a property that you do not want.
Good real estate investors have goals, and they write them down. Is it your
goal to make $100,000 in profits this year? Is it your goal to have a million
dollars in the bank in three years? Without knowing your goals, you can't
map a plan to achieve them.
Most real estate investors have a plan, or a system so to speak. For instance,
they may make a certain number of offers each week. They may only work with
one property at a time, or they may work with a certain number of properties
during certain time frames. They may not buy or sell any properties at all
during certain times of the year.
In the beginning, statistics show that a beginning real estate investor will
make fifty offers, and only one purchase out of those fifty offers. Don't
feel like this is a waste of time. If you made $50,000 from that one property
that you did buy, you can look at it like you actually earned $1000 each
time you made an offer. If you made fifty offers in a month, bought one property,
and made $50,000, you earned $50,000 for that month!
Good real estate agents are positive people. They often incite excitement
in other people. They have a way of bringing people up, and making them see
things in a more positive light. When people fail in real estate investment,
it is often because they did not have the right frame of mind. Real estate
investors need confidence in themselves, and their ability to succeed.
That confidence is usually derived by educating themselves about real estate
and real estate investments. They take courses, constantly read, and attend
seminars on a regular basis. They also commonly associate with people who
share common goals.
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Articles
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Beginners Real Estate Investing Articles
How to Advertise a Rental
Property
How to Build Equity
in any Real Estate Market
How to Find Motivated
Sellers
Developing a Profitable Real
Estate Investing Strategy
Bird Dogging: Getting Started in
Real Estate Investing
Buying Your First Home
Using Lease Options to Purchase Real
Estate
Real Estate Foreclosures
Increase Your Net Worth Through
Real Estate Investing
Interest Only Mortgages
Real Estate Investing
No Money Down Real Estate
Investing
The Power of the Lease Option
Real Estate Investing Tips
Real Estate Investments
Refinancing Your Mortgage
Loan
Paying Your Mortgage
Selling Your House without a
Realtor
"Subject To" Real Estate
Financing
Using Trusts as a Real Estate
Alternative
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