Real estate investment
Many beginning real estate investors start by trading real estate to make a quick buck. If you want to make more money investing in real estate, you need to know a few basics.
What is the definition of real estate investment?
Simple definition: buy a property and resell it quickly, hopefully for a big profit. People often think of trading houses, or buying and selling a house quickly, as the only way to make money by trading real estate. However, some investors specialize in other types of properties such as land or strip centers.
Some confusion arises about the process of making money by turning over properties. People who specialize in finding negotiable real estate, obtain a purchase contract, and then sell the contract before taking title to the property are known as “bird dogs.” These beginning real estate investors start out with no startup money as follows:
- Finding a seller under stress with a property on sale
- Secure a sales contract
- Sell your contract for approximately $ 500 to $ 5,000 to an experienced real estate investor
Isn’t it illegal to invest in real estate?
Investing real estate is not illegal. However, many unscrupulous investors committed mortgage fraud to make a quick buck. Some of these investors, working with mortgage brokers and appraisers, resold homes to unqualified buyers by inflating the property’s value and homebuyer ratings. Often times, these home purchases had little or no money to start up. When these new homeowners defaulted on their mortgage, the mortgage lenders lost money because the home was not worth the inflated purchase price.
To avoid legal problems in the real estate exchange, do not commit mortgage fraud.
To make money by changing real estate:
1. Prepare your financing so you can close a deal quickly.
2. Know your market to know what makes a good deal.
3. Find a property on sale that is owned by a seller under stress to sell.
4. Secure a purchase contract in your favor.
5. During escrow, plan your sales actions.
6. Close the property on time.
7. Get your sales plan in motion immediately. If the property needs repair, be prepared to do so immediately.
8. Market your property to your target market. Don’t just list the property and hope for the best.
9. Find a qualified buyer. Have a loan officer verify that your buyer meets all mortgage requirements.
10. Stay legal. Don’t use an inflated appraisal. Don’t give your buyer the down payment. Don’t help your buyer create fake W2s, write fake letters of credit, or prepare fake documents. You can pay a lot of your buyer’s closing costs to make the purchase easier.
You can make money investing in real estate. Buy cheap, sell for full market value, avoid mortgage fraud, and enjoy your profits.
Copyright © Jeanette J. Fisher