So, you want to make money from real estate but don’t know how to get started? Well, it’s not as difficult as you might imagine. Even if you don’t have a large amount of capital behind, you can still get started on the road to real estate riches today. Here we show you how.
If you want to get started on a successful career in real estate investment, you don’t necessarily need a lot of money behind you. In fact, you don’t even need a lot of time, as you can start on a part time basis. And the best way to start learning about real estate investment may be to start out by spotting potential deals for other investors.
Why would you find a deal and provide the information to another investor to make all the money? Well for starters, the investor will pay you handsomely for a little effort on your part. And once you’ve made a few of these deals, then you’ll find you’ll have the capital behind you to then start making deals yourself. It’s also a great way to learn the ropes for an inexperienced investor.
Here’s what you do. You look for properties where there may be the opportunity to buy them at a bargain basement price. A typical property may be run down, bordered up or have overgrown lawns and gardens. You then do a little research on the property. Speak to the owner or the next door neighbor in order to find out some background. Is the owner in financial difficulty? Are there outstanding payments owed on the property? Is the couple who own the property going through a nasty divorce settlement? And so on.
You’ll also need to get some particulars about the property, such as its full address, the owner’s name, the age of the property, how much is owing on the property, what repairs are needed etc. Also try and get a couple of good photographs of the property if you can. When you have all the details, then it’s a matter of finding an investor who is looking for properties to invest in for a quick profit and offer them the details.
By spotting a deal for another real estate investor, you could typically expect to earn between $500 and $1,000 depending on the potential profit of the property. Not a bad profit simply for selling your information to another investor.
Another option you might consider is taking control of the property yourself, without putting any of your own money down. You might do this by putting it under contract and then selling the deal to another investor. As there is a higher level of risk in doing this, you can expect to make more money per deal, typically between $1,000 and $3,000.
Here’s how it works.
If you find a property whose market price is $100,000, you agree to purchase the property at a 20 per cent discount for $80,000. The property requires repairs of around $10,000 and when these repairs are completed the property would be worth in the vicinity of $115,000. You sell the property to another investor for $82,000, and make an instant profit of $2,000. The property investor makes the repairs and then is able to sell the property for a profit. You both win!
As you make a few deals, you will begin to build some working capital that you can then use to make your own deals. Also, by scouting for deals and selling them to other investors, you will also have started learning some valuable lessons and you will gain the necessary experience to be able to make your own deals.
When you do begin making your own deals, you need to have a clear idea of what you are going to do with any properties that you invest in. Are you going to try and sell the property straight away, flip it, to another investor? Or are you going to make repairs to the property and sell it on to another investor or to an owner occupant?
If you decide to fix the property, you need to have a clear understanding of how much time and money will be needed to put into the property in order to get it to a suitable state to sell and make your profit. This is one area where things can go wrong, so perhaps this should be left until you have more experience and confidence.
When selling a property, don’t make the mistake of trying to sell it for the best possible price. If you hold out for a better price, you are jeopardizing the deal. The longer you hold onto the property, the more it is going to cost you. Aim to make a smaller profit and sell it quickly. You’ll make more money that way because you’ll be selling more properties. If the potential buyer can see that they are getting a good deal or that they will also be able to make a profit on the property also, you will be sure to sell it quickly. And before you know it, you’ll be on your way to making a profitable career from real estate.