In one sense, real estate is one of the safest businesses to get into, because, as long as the population continues to increase, there is always going to be a demand for more property, either for housing, business or both. So it’s no surprise that real estate investment was, is, and always will be, one of the big industries not just for America, but for the world in general. However, there’s a perception that in order to be a successful real estate investor, you need to already be rich. That’s just not true, and if you’re thinking of getting into it for the first time yourself, it’s absolutely possible, but there are a few things you need to keep in mind.
The “Flip”
One of the big things in real estate today is something that almost anyone with a little money and discipline can get into, and that’s called “flipping” a home. In this scenario, someone buys a home not with the intention of moving into it and living there, but to sell it again after a period of time and make even more profit than what as initially paid for it.
Often, this means buying cheap property that is not in great shape, and then taking the time to restore it to a more desirable condition. This often means buying older, neglected properties, or rental buildings with structural problems, and even infrastructure issues, such as out of date plumbing or wiring.
The goal here is to spend the money required to repair the structure and make it appealing for resale, but not to spend so much money that, after all the time and expense, your profit is too small to really be worthwhile. In these situations, the best thing, if you know how, is to do as many of the repairs yourself, or find cost-effective people that will do the job without compromising too much on quality and cost.
But how do you get into a position where you have the money to be able to start making these purchases?
Live & Then Move
One popular option for people starting out is to take the plunge and purchase multi-family dwellings. Buying a duplex house, for example, allows people to make a first real estate investment where they can live in one unit, while renting out the other. If you properly maintain both units, and continue to do work to improve their value, this makes it quite possible to resell the entire duplex unit for a much greater figure than what you paid for it.
Of course, the other solution is to make sure that you get the proper financing, which you won’t always get with a bank, since their requirements are often steep and more cautious. This is where a hard money loan may come in more useful, and if you consult with experienced hard money lenders, you’ll quickly get up to speed on what your financial options—and responsibilities—are with this type of loan.