For those who are like me and are thinking about entering the real estate investment game, I want you to consider two strategies that I think will be great money-makers for short- and long-term wealth. The first is a short-term strategy called 'buy and sell', and the second is a long-term strategy called 'buy and hold.' This blog post will serve as an introduction or overview of the two strategies. If you are interested in learning more, your next best step is to get as informed as possible by visiting the library, joining investor groups, and attending as a many investor conferences and seminars as possible.
'Buy and sell' is built around getting income now. First, get control by gaining an option contract or acquiring the property. Decide whether you are willing to make improvements or sell it as-is, then place the property back on the market as soon as possible at a higher price. My personal strategy will be to find homes priced under $200,000 and wholesale them to other investors. Why $200,000 and why other investors? $200,000 and lower is where most first-time buyers qualify, and demand is highest in that price range. We want to wholesale to investors because they have more cash and usually don’t depend on long drawn-out transactions which typical homebuyers are forced to endure.
'Buy and hold' is considered by many as the true financial wealth-building strategy. This model encourages us to (a) buy it right, (b) pay it down then (c) pay it off. Buy it right by buying the property at 80% of the market value; this guarantees the best chances for equity and cash flow. Paying the mortgage down adds to your equity build up, and paying the mortgage off will give you a stream of income for the future when your money will start working for you.
Your aim should be to build a system around the method(s) you intend to use. The system is what you must develop to become a lucrative investor. It will help you get leads, evaluate deals, and consistently make money with bankable results.
Two great books I would recommend on this subject are The Millionaire Real Estate Investor by Garry Keller and Flip by Rick Villani.
No comments:
Post a Comment