Making Money in Real Estate Investing

Real estate investing is quickly become the 'way of the industry,' in other words, even inexperienced individuals looking to make money in real estate are turning to real estate investments for a profit. It's not for the impatient, or for those who have no interest in research and education techniques. There's a process in learning what does and doesn't work in this fast-paced environment. Aside from working as a real estate agent, there are several ways to make money as a real estate investor- with or without credit or financial backing. 

While seasoned investors may turn to buying and selling notes, or wholesaling properties, what other methods are easy for first-time or newer investors?

There are three basic options every real estate investor should be familiar with, or become familiarized with, in the industry- tenant/landlord, flipping, and REO/short sale. 

House Flipping
With television networks constantly developing new shows centered around real estate and the 'flipping' industry, many entrepreneurial minds have given the business a chance. With flipping, individuals or partnerships purchase a home in need of repairs and renovate it, fix it, and sell it for a profit. Some flippers also acquire houses, add them to their portfolio, and simply sell them when the market is on an upswing or the the timing is right for a property. It's a short-term real estate investment strategy and, if approached with education and care, can turn an easy profit for investors. 

The Rental System
It's a process as old as the industry itself- a real estate investor purchases a property in a specific market, and rents it to a third party for a set amount. Since the investor is responsible for the mortgage payment, taxes and any maintenance/repairs, he or she sets the price to, at the very least, cover expenses and gain equity on the home. In some neighborhoods, the rent price can command more than the real estate investor's expenses and thus allow them to turn a profit. This is, by far, one of the most common ways to make money in real estate investments.

REO & Short Sales
This could be split into two different categories, but for the purpose of this information I've combined them. Short sales are often difficult, but if a real estate investor has patience, short sales can become easy 'flip' purchases. The idea is to buy a home at a highly discounted rate and eventually turn it around for a profit. Foreclosures, on the other hand, are REO properties (short for Real Estate Owned) that are owned by the bank and a specialist is assigned to 'unload' the properties from the bank's portfolio and work on cash flow. Foreclosures are an easier purchase, and are usually also 'flipped' by real estate investors for a profit. At times, both types of property could need renovation as well. 

I invite you to read this week's blog post on my website - and encourage you to subscribe to my new posts, which are updated weekly, to learn more about investing in real estate, as well as my mentorship programs.