A Real Estate Investing Primer – Real Estate
A Real Estate Investing Primer
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. Its 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. Thats 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 wont 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 youre completely new to real estate investing then the only sort of investing strategy youre 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 wont 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 youre just starting out you likely wont 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 thats 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. Its 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 youre 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 Id 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 theres 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 wont 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 youll be able to do, the more money youll make.
I hope this article gives you a bit of an idea of what the world of real estate investing is like. Theres 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. Dont be discouraged if youre getting turned down a lot - just remember that when it does pay off, it will pay off big!
About The Author
Adem Hamidovic is a part time real estate investor and operator of www.ProfitPiggy.com, a website devoted to new and experienced real estate investors alike.
admin@profitpiggy.com
How to Build a Real Estate Investing Power Team – Mortgage
How to Build a Real Estate Investing Power Team
Adem Hamidovic
As you continue to read about real estate investing, you will no doubt come across the term power team. What is this power team A power team is a group of people without whom successful real estate investing becomes very difficult, if not impossible. Included in a power team are at least one real estate agent, a mortgage broker, and a real estate lawyer, all of whom will have experience in creative real estate investing.
So, how do you go about building this team Well, you could just get a copy of the Yellow Pages and start calling, but that will most likely take a very long time, time that could be better spent working on real estate deals! Wouldnt it be better to have these people call you I thought so, so heres what I did. Keep in mind that this technique not only netted me a power team, but also a list of potential partners/buyers for future deals.
The local paper offers a deal on weekend real estate listings, so I placed an advertisement in the paper that read:
"Fixer-upper for sale. Cheap. Need cash and quick closing. 555-5555"
What sort of people would respond to an ad like this Some will be tire-kickers and the curious, but a good number of callers will be investors and real estate agents. I had the number in the paper forwarded to a voicemail service, and its a good thing I did as there were a lot of calls! I find that those who are just curious about the ad tend to hang up without leaving a message, so that takes care of those that arent serious.
After listening to the messages I found that there were two real estate agents that had answered. I called the first one, George, and told him that the home had sold, but would he be interested in working with fixer-uppers in the future He replied that he would, but didnt seem interested in discussing it much further. Now, I should mention here that I never actually had a home to sell - what I posted is called a ghost ad, used to guage interest in something. You may not feel entirely comfortable with this, and thats fine. Simply post a different ad that gets the same sort of message across.
The next agent, Elizabeth, was much more receptive. We spoke for well over an hour about her experiences in real estate - it turns out that she actively invests in real estate herself. She would be more than happy to search the mls on my behalf, as well as submit as many offers as I would send her way. Perfect!
And heres the best part: since I had found a real estate agent who also invests, I was also able to use the resources that she uses in her deals. So I now had access to a great real estate lawyer as well as a mortgage broker, along with a recommended property inspector. That saved me loads of work and time. My power team was now complete!
Ive since become good friends with Elizabeth, and she regularly sends me listings that havent made it to the mls yet. This gives me a huge advantage in pursuing deals as only a relatively small number of people are aware of the sale. I picked up my latest rental property this way - the property was going to be listed on the mls in two days time, but since Elizabeth let me in on the deal early I was able to close before the general public became aware.
A good power team is crucial to your success as a real estate investor, and oftentimes finding one member of the team can lead you to the others. Happy Investing!
About The Author
Adem Hamidovic is a part-time real estate investor and operator of www.ProfitPiggy.com, a website devoted to new and experienced real estate investors alike.
admin@profitpiggy.com
Understanding Real Estate Terminology – Mortgage
Understanding Real Estate Terminology
W. Troy Swezey
Purchasing a home can be a complicated and confusing process, especially for first-time buyers. Throughout the process, first-time home buyers will encounter a variety of unfamiliar real state terms. There are several key terms associates with purchasing real estate that are helpful to learn.
For example, many buyers confuse the terms broker and salesperson. A broker is a properly licensed individual, or corporation, who serves as a special agent in the purchase and sale of real estate, a salesperson is an individual employed or associated by written agreement by the broker as an independent contractor. The salesperson facilitates the purchase or sale of real estate.
Once you decide to purchase, a salesperson will prepare a sales contract to present to the seller along with your earnest money deposit. The sales contract is the document through which the seller agrees to give possession and title of property to the buyer upon full payment of the purchase price and performance of agreed-upon conditions. The earnest money is a buyer