How does real estate investment work?
The simple act of buying real estate is not a real estate investment.
Strategic classification of many properties for sale and purchase of a property that meets their objectives. Each real estate transaction must have one or more of the following to be called real estate investment, rather than real estate speculation:
Here are 4 simple tips to keep in mind when starting to learn about the real estate investment process:
1. Invest only in properties that offer instant stocks or solid cash flow:
Preferably, the property you choose to invest in will offer you both! “Instant equity” occurs when you change the use of a property, for example, when you buy a distressed property and rehabilitate it in excellent condition. Cash flows are generated by leasing your property to third parties, generating an income stream.
2. Learn how to use OPM:
Most investments generally require you to invest all of your money to make a profit. In real estate investing, you can use other people’s money to invest in real estate. If you invest $ 100,000 of your own money in a $ 100,000 property and get an annual return of $ 10,000, you will get a return on investment (return on investment) of 10%. However, with the same $ 100,000, if you invest just $ 20,000 (20%) of your own money and get a loan for the rest ($ 80,000) and generate an annual return of $ 5,000, you will get a 25% return on your initial $ 20,000 investment.
3. Start your real estate investment with clear investment objectives.
Remember, buying a property is not an investment: without clear goals, it could be more speculation and too risky for most smart investors. You or your team must have clear objectives to be successful in your investment.
4. This brings me to my final tip, which is “Experience Pays”. To be successful in real estate investing or almost any other investment, you will want to trust your own experience or that of others. If you don’t have the knowledge or experience, you can carefully seek the help of others who do, and use your experience for your own personal gain.
If you are tired of losing money or very small profits from traditional investments like stocks, bonds, mutual funds, certificates of deposit, etc. But you may not have the time, money, knowledge, resources, and / or contacts to succeed.