It’s one of the most popular and profitable ways to invest in real estate these days especially because of the onset of the global financial crisis. How to make money in real estate? Buy a house cheaply, renovate it, and resell it for an immediate profit. Sound simple? It is, but only if the property is cheap. If not, look for a better bargain.
So how do you look for bargain? How do you make money investing in real estate? Here are some advices on how to make this method work for you.
Make contacts. You can’t do it alone. You need help from experts who know their craft. Build your dream team of competent professionals such as an accountant, lawyer, banker, lender, realtor, contractor and management company. Start by finding a real estate agent you trust who has experiences working with investors. Your agent will also have business contacts and can set you up with reliable professionals.
Pick the right property. Identify a real estate property in poor or outdated condition. A savvy real estate investor can locate a house ripe for renovation in an appreciating neighborhood. Furthermore, a thorough real estate due diligence would help you identify potential drawbacks of the real estate you’re eyeing for.
Remodel carefully. End buyers, the people who purchase these fixed-up homes, are catching on to bad renovations. Do the right job, and you’ll come out ahead of your competition. Make sure you use high-quality materials and your contractor does excellent craftsmanship. Keep in mind you may need to renovate the kitchen, bathrooms, and bedrooms, and eve replace the roof to update an older home.
Find good financing. All this work can wind up costing a lot of money. Never fear. There are short term private loan products that can provide for 100 percent of the purchase and rehab costs with little money out of pocket. This is good news if you don’t want to empty your life’s savings.
Spot the scams. Don’t fall for phony promises of instant wealth. Let’s face it – getting rich in real estate doesn’t happen fast. It happens slowly because the element here is time. Be suspicious of get-rich quick schemes and anyone asking for upfront money. Remember, anything worth having doesn’t come easy. You’ve got to get out there, work hard, and make it come to you.
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This is not to discourage you, that real estate is a stagnant market. This is not like a food that buyers keep on buying.
But to make things positive, there are alot who made their wealth out of this.
Hi Tyrone, nice article. I’m glad that you used to work for a Special Purpose Vehicle (SPV-AMC) company before which means you know about the great opportunities out there for investors who invest in real estate the way we know it. Finding properties that are way below market value (foreclosed properties and those from highly motivated sellers) and flipping them for a profit or selling them on a rent-to-own basis, or simply having them rented out for positive cashflow is a great way to build wealth and passive income, and this is based on actual experience.
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By the way, education is the key for a newbie real estate investor to avoid scams. From fake titles, fake buyers/sellers up to one-sided joint ventures, there are really a lot of nasty people out there who will do all they can to take your money. However, if one is well equipped through education, and well informed, these can be easily avoided. Oops, sorry for the long comment, I’ll stop now before this begins to look like a post on my blog. =)
Hi Jay, I learned a lot with my job experience in a Special Purpose Vehicle before not just when it comes to real estate but also when it comes to loans. There is really a gold that needs to be mined in these kinds of investments if you know how to manage risks. I agree with you that education is the only key in a successful real estate investing venture. The richest persons in our country like Ayala, Henry Sy, and Manny Villar all made their wealth thru a successful real estate business.
hi, i found your blog site really interesting especially when you think that there really is a way to gather millions. i also agree that real estate is a good money maker, but its a one time big time shot, nonetheless, life can be good sometimes and there’s no harm in trying. lastly, i hope you don’t mind that i sited your site in my nominations for the Top 10 Most Influential Blogger.
Hi Mae Lin, thanks a lot for the nomination. =) I’ having problems commenting on some blogger blogs because of my browser.
this information helped me a lot – nice outframe of things.
nice article, it sounds easy but finding a low/cheap house to buy is very hard.
i totally agree with what jay said. to add, don’t scorn on the idea of having to pay advisors such as brokers, lawyers and accountants. you need to trust these people as you’re going to establish some relationships, but of course you should know what they are doing–as ken mcelroy said, trust but verify. especially for the brokers. it’s not that i don’t trust them, it’s just that sometimes interests need to be aligned first in order to ensure good business transactions. don’t be afraid of the costs of hiring lawyers, it is much helpful to hire them especially for contract drafting so you wouldn’t get yourself into trouble in the future.