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By Adem Hamidovic
There are a great many books and web sites devoted to real estate investing
out there, but most of them concentrate on one specific area of investing.
It`s often hard to find a general description of real estate investing, one
that lists the various real estate investing strategies and how to get
started. That`s what this article will set out to do.
Before beginning, you must understand that real estate investing is not a get
rich quick scheme. Real estate investing can, and will, make you wealthy, but
it certainly won`t happen overnight and it will require work. As you perfect
your technique and gain experience, the amount of work needed to gain a lot
of money will reduce, but it will take effort and persistance to make it there.
If you`re completely new to real estate investing then the only sort of
investing strategy you`re likely aware of is rental properties.
Landlording has been around since there have been houses and people to rent
them to, and it will continue to be a wealth builder. In fact, most of the
`no money down` real estate strategies you hear about still include rentals
as part of their plan. Still, there are other ways to make money from real
estate investing out there.
The next most `traditional` method is to buy a fixer-upper, fix it up, and
then sell it for a profit. This is commonly referred to as `rehabbing` and is
a very good way to make a lot of money in a relatively short period of time.
Most rehabbers won`t even look at a property unless they can make at least
$20,000 of profit, and this is usually within 3-4 months time. Rehabbers tend
to be experienced investors with available money, or have partners who help
provide any extra cash required.
But if you`re just starting out you likely won`t have access to large amounts
of money. One way to get involved in this area of real estate investing
without needing any money at all is to `flip` houses to these rehabbers. What
this entails is you going out and finding these fixer-uppers, noting all the
work required to fix the place up. You then place a low offer in to the
owner, taking into account the fix up price and some built in profit. Once
you have the house under contract you then flip it to a rehabber for a small
fee. This can result in several thousand dollars for you, without you having
to spend a dime. `Flipping` properties can be a great way to start your real
estate investing career.
Another `no money down` technique that`s popular on the late night
infomercials is called `lease optioning`. This is basically a rent to own
strategy that allows you to control a property without ever taking ownership
of it. It`s a slightly more complicated strategy that warrents its own
article, but it does allow you to make money in several different ways, each
without ever having to spend any of your own money. If you`re not put off by
longer term investments then lease options are definately worth more research.
There are other strategies that involve foreclosures and getting the home
owner to sign the deed over to you, but for now I`d suggest learning more
about flipping and lease options as entry-level real estate investing
strategies.
How do you find properties that would make good real estate investments?
Again, an entire article can be devoted to that, but there are basically two
ways: you go looking for them, or you get them to come to you. The first way
involves reading the newspaper classifieds and scanning the Multiple Listing
Service (MLS). This is where having a great real estate agent is a must -
they can get you more details on homes than you can view on the mls website,
and can often let you know of great deals before they even become available
to the general public.
Having home owners contact you means setting up an advertising campaign. This
can involve placing ads in the newspaper, placing bandit signs at strategic
locations around town, starting a direct mail campaign, etc. There are many
ways to let people know that there`s a new real estate investor in town, and
it would be in your best interest to try each of them to see which ones work
best for you.
Whether you decide to go looking for deals, have them come to you, or both,
they key is to be persistant. Real estate investing is a numbers game - most
of the time you won`t be able to make the deal work, but every time you do it
translates into thousands of dollars for you. The more owners you talk to,
the more deals you`ll be able to do, the more money you`ll make.
I hope this article gives you a bit of an idea of what the world of real
estate investing is like. There`s a lot to learn out there, and all of it is
very interesting. Find the area that interests you the most, then get out
there and start talking to home owners. Don`t be discouraged if you`re
getting turned down a lot - just remember that when it does pay off, it will
pay off big!
Adem Hamidovic is a part time real estate investor and operator of www.
ProfitPiggy.com (http://www.ProfitPiggy.com), a website devoted to new and
experienced real estate investors alike.
admin@profitpiggy.com (mailto:admin@profitpiggy.com)
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