Many people hear and read about how to invest real estate but do not really know what real estate investing really entails. They know that it has something to do with making money buying and selling houses which it, in simplified form, actually is. To be a success as a real estate investor you will need to learn a lot more than just knowing how to buy and sell houses. Study real estate investing thoroughly before starting to invest.
The first thing you will do as an investor is to buy a property. This property could be many things: a house, a mobile home, land, apartment buildings, office buildings, etc. Before you purchase your real estate you need to know what you are going to do with it. Have a plan in place with the exact steps you are going to take to make your profit from this purchase.
One of the easiest ways to get started as an investor is to buy a single family house at a below market price, improve the house to raise it’s value, then resell for a profit. This is now commonly known as flipping a property. Of course, there are a lot of other factors involved such as financing, finding the right property, etc.
Another way for beginners to get started is by purchasing real estate to be used as rental property. You will not get a large amount up front but you will generate a monthly income. You can buy one property at a time and slowly build up your real estate portfolio with your equities building on each property.
Buying foreclosed and pre-foreclosed property is another way to make money from real estate. These properties are usually below market value but most of them need a lot of repairs. Buying foreclosure properties usually involves bidding on them at an auction, but sometimes they can be bought through a real estate agent or straight from the lender.
Buying distressed properties can also be a good way to get a property cheaper. These are usually pre-foreclosures. Distressed properties usually have some negative effect on their value because of appearance, condition, or the financial situation of the owner. You will likely be working with a bank that holds the mortgage on these properties.
There are many ways to invest real estate and these were just a few. Once you start investing you will start seeing other opportunities for investing in real estate such as short sales, using hard money for investing and many other investment strategies. Some require very little down, like wholesaling or bird dogging. Start researching, studying, and learning about how to invest real estate and maybe soon you will be building your real estate portfolio.