Real Estate Investing – It Really Sucks If You Don’t Know This

Can an ordinary individual that has never invested in real estate really make money? Or, will the risk kill him/her financially?

Evidently, it is possible if you follow a simple strategy.

A lot of people, when they think about making money in real estate investing, equate this with flipping properties. Much like what you see on some of those TV shows. Well, as it happens there just maybe a better way. A way that promises to reduce the risk of loss significantly, and at the same time gives you time and money to increase the value of your real estate property before you sell it.

Reducing the Risk

When you look at or study successful long-term real estate investors, you will find they have multiple rental properties. They don’t simply “flip” their way to profits. They build a passive income real estate portfolio first, then cash out when the timing is right. This is a technique almost anyone can model.

It is smarter, making it a less risky way to get involved in real estate investing. In a nut shell, this makes it possible to let someone else pay the mortgage, build equity and flip the property when the market in a particular area reached its sweet spot. It is also a much less stressful way of turning a nice profit (even before you decide to sell).

A better model

A big advantage of this business model is, you are not at the mercy of the market. You are not forced to take a loss, or make an all too tiny gain because you need to get out before the next payment is due.

By structuring a real estate property as a rental, you are able to look at the market trends in the local market, and as one of your leases comes up for renewal you are in a strong position to sell for a healthy profit. This puts you in the-drivers-seat. Maximizes control. Reduces stress and maximizes profit.

Structuring property acquisition in this way may not be as “sexy” as flips, but that’s just fine. It’s better to know that your investments are safe, and you are never going to put your future at risk because of one stupid decision, isn’t it.

Thinking about real estate investing for profit, then you might want to look into how to best structure an acquisition, a sale, or a rental. But more importantly the trends as they occur in your local area. While all of this sounds intimidating it need not be. There are many sources of good information available. There are websites that cater to real estate investing as well as membership sites that provide condensed information to their memberships. Having good information, knowing your options has always been the best way to achieve in the business world. This applies to real estate investing even more so.

It is never too early or too late in the process to start acquiring good usable information. A foundation of knowledge and going one step at a time is a great way to minimize risk on your path to financial freedom through real estate investing.

Real Estate Auctions – Knowing When to Bid at the Real Estate Auctions

For prospective home owners, the thought of spending hundreds of thousands of dollars on a new real estate build can seem overpowering. The alternative is to purchase a home at auction. Real estate auctions are set up by the lender to rid the bank of the burden of the piece of real estate that has been foreclosed upon. If the bank is not able to sell the foreclosure at a price they see fit, they will post the property for public auction.

Public real estate auctions are tricky, in that, the lender does not have to sell the home even if the bids are relatively high. The lender is in complete control of the home title and can choose whether or not to accept the highest bid during the auction. If the lender does not accept the bid, the auction will be for naught and the lender will retain ownership of the piece of real estate despite the auction.

For those trying to purchase a home through a real estate auction, it is best to be prepared for the home sale from the time you set foot on the property. There are five things every potential buyer will need to do in order to prepare for a real estate auction.

o Obtain all information. Many real estate auctions will require the home buyer to present some form of deposit or proof of lender approval at the time of sale. If the lender agrees to the price, and often a lender representative will be on site for the auction, the buyer will need to prove they have the financial means through which to pay for the home. The initial deposit required or proof of immediate lender approval is always a great item to have on hand.

o Take a shot or two. When walking through the home before the auction begins. Take a few pictures of any and all blemishes in the home. Make sure to look beyond the physical knick and scratches on the homes surface. With camera in hand, you are looking for things that may potentially cost many dollars to fix, not just a coat of paint.

o Check the comps. Before heading off to the real estate auction, make sure to check the comparable home prices in the area. If the homes in the area are selling for $150,000 and the bid on this home reaches that point, there is no sense in buying this home at auction. Real estate auctions are often held on homes that are dilapidated and in need of repair. If a home in good condition is selling for the same price as the auction of this home, you can find a better deal.

Real estate auctions are a quick and easy way to save thousands on the home sale price. When attending an auction with the real idea of buying a home, you will need to be prepared for the chance that our bid may actually be the one chosen. Obtaining pre approval for a home loan, walking the home for possible high priced fixes and comparing the house to homes in the area are the best ways to stay on top when the gavel hits the podium.