Are You Interested In Real Estate Investing? Read This To Get Started!

Are You Interested In Real Estate Investing? Read This To Get Started!

When starting your real estate investing ventures, you should be looking for 2 types of deals. The first is a house with an opportunity to buy it at a deep discount, typically 30-50% off the fair market value (FMV). The second type of deal is one that you could buy on seller financing terms. Either of these requires a motivated seller. For the first one, look for the homes that require work. These homes will typically cost a lot less, even though you will often require to do some level of work to get it in ready to sell condition. Start by looking for homes that may be gently run down and require some work, homes that require cleaning up, painting and in many cases you may have to replace the carpeting. However, you won't have to buy a home that is a total rehab (also known as a 'gut job'), because that will generally cost too much to repair and will cut in to your net real estate investment profits (ROI = return on investment).
If you're known for you handyman skills, you may be able to do a number of the needed repairs by yourself, allowing you to save funds. Otherwise you could hire a trained rehab contractor, someone you're sure is qualified to do the job, and insured in case of mishaps. If you require to go this route, you should research affordable subcontractors in your area. You may require to start with the recommendation of someone you know who has had some work done on their home or a referral from someone in your local REIA (real estate investor's association), because you may receive a more reasonable price and better quality work from someone you know, or was referred to you.

If your real estate investment property has structural problems, you should get an estimate, before you buy the home, from a reliable local contractor. Another thing to remember is that if you're going to be in business for any number of years that you should always work to befriend a reliable contractor, because they will help you find any problems you were not aware of before you make the final decision on what you plan to offer for the property.

After you have constructed a team of contractors and maintenance people, and you have successfully renovated and sold a few homes, you will be experienced which will allow you to be more efficient and confident about the homes you buy that require rehabbing. With time and practice, you will be able to buy homes that many investors won't think of buying, and get some great REI deals. In fact this will give you a big advantage over other investors, because you will be able to buy homes at a lower price and use the estimated costs of the repairs as leverage in your negotiations.

Once you have learned how to do all of the repairs, even the ones with the structural problems, you will find that you have a gigantic advantage in the real estate niche. You will literally be able to buy any home, even the ones that the other investors wouldn't touch. You will find that this can be a huge money making opportunity if you find a home in a great neighborhood that is desired by many homebuyers. Once you have done all of the repairs, you can then resell the property for a higher price than what you originally paid to buy the home.

When begin your search for houses that you can fix up and resale, focus on taking your time, so that you buy the right home. You don't have to waste your time, money or experience buying the biggest house you can find, when you first start out in real estate investing. Instead by the smaller homes and then work your way up to the bigger homes, which will bring you the bigger profits. Look for motivated sellers in order to receive a nice price or favorable terms.

Don't be in a hurry to jump into anything when you're thinking of investing. It is rare to make a huge profit overnight when you're just starting out because it will take you a little while for you to learn how to do everything properly. When you have been a real estate investor for a while and have sold a few homes, you will be ready to take on more complex investments. You will find that real estate investing is a great business that you will truly enjoy and profit from in many ways. Even in today's economy.