So we have a new President this year. He is the oldest and the wealthiest to ever be elected. So how did he make his money? Real Estate.
There have been more millionaires created through Real Estate investing than any other occupation. There are constant late night info commercials about real estate investing. So how do YOU get started in real estate investing? That’s what we will cover here.
Different Methods Of Real Estate Investing
Getting started may not be as hard as you think. There is so much FREE information across the web to learn how to get started. We found this great video from one of our favorite places on the web Bigger Pockets that gives a 10,000 foot overview of real estate investing:
He gives a good broad break down of the different types of investing. With the investors that we have spoken with, most of them recommend starting with fix and flips over long term rental investments, depending on your financial situation. If you already have a lot of cash saved up, then purchasing rental properties is possible for you. However, if you need to build your cash reserves, then “fix and flip” is the route for you.
You have probably seen all of the TV shows for fix and flips. Basically they are buying a discounted property that needs repairs, complete the repairs, then sell the property for retail to the general public. The key here is that the property is discounted. You can not pay retail for a property, do repairs, market it for sale and expect to make a profit. This is where most real estate investors fail! It can be said that you actually make your money in real estate when you buy a property.
Finding Good Investment Properties
Finding these properties that make good candidates can sometimes be difficult. It will take a lot of marketing, or having a good real estate agent that understands you are an investor to search the MLS to find these good discounted properties.
If you choose the marketing method to find your own deals, there are a few ways to go about this. First, and probably the most used method is through mailings. Some investors use post cards, others use letters. The thing here is that it’s really a numbers game. You may only get 1 real deal out of every 1000 mailers you send out.
You also don’t just want to send out letters or post cards blindly to anybody and everybody. You need a list. These lists can sometimes be purchased depending on who you want to target. Good candidates for mailers include people who are getting divorced, have inherited a property, are out of state owners who are more than likely landlords, or even people who have been in their property for a long period of time.
As you can see, this can be very time consuming, and costly. But there is another method that real estate investors use to find good discounted properties for their fix and flips, and that is by using “wholesalers”. What is a wholesaler? Mark Ferguson explains it very well:
Wholesaling is a simple concept based on buying and selling houses quickly. A wholesaler will either buy houses or get them under contract well below market value and then sell the houses to another investor. Usually the end buyer has cash to buy the properties, because there is not time to get a loan. The key to being a successful wholesaler is finding great deals and having great buyers. The most successful wholesalers tend to use direct marketing to find sellers and have a huge list of cash buyers who are looking for great deals.
Making use of a wholesaler can be a huge time saver, as well as get you into flipping houses a whole lot faster. But how do you find these wholesalers? There are two easy methods.
First, your local REIA (Real Estate Investor Association) which you should already be a part of. Besides finding wholesalers you can also learn a lot about investing at these events. They usually have a small fee for attending anywhere from $10 to $50 which is well worth the information and connections you will make.
Secondly, the web. Many of these wholesaler have websites where they offer off market properties to other investors. They usually have some sort of sign up form to be notified of new inventory as well as a list of currently available properties.
Getting started in investing in real estate really isn’t that hard once you choose which route you want to take and then have the ability to find good discounted properties. Interest in learning more? Then checkout below –