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(Buying and investing in real estate is one way to build wealth and a healthy financial portfolio. )
Even when the market is slower than normal, you will find that you can still make some tremendous profits by buying, renting and investing in real estate.
The key to making money in real estate is buying at a low price and selling at a high price, but there are other ways to profit as well.
Buying real estate and renting it out, or becoming an investor is a very smart business strategy and wealth building opportunity.
A December 8, 2006 article by Elizabeth Weintraub of about.com, “Buy rentals for even less,” discusses a book that gives some very helpful real estate investing tips.
The book, “Buy even lower,” by Scott Frank and Andy Heller, gives some very pertinent advice to anyone interested in making money in the real estate world.
“The authors tout investor discounts from 5% to 30% and lay out their Six Golden Rules. Each investment strategy involves a separate discount and varying levels of risk, whereas the Golden Rules consist of practical, solid advice. Buy Even Lower is worthwhile reading for anybody who is thinking about buying rentals or investment properties, new or experienced investors alike.”
They say that the time to make money in real estate is when you buy. One of the key factors in this is knowing the market.
“The authors propose that each investment strategy involves a variable investor discount, and it is true. When I listed a rat-infested, urine-soaked house, which was in a state of total deterioration, the sellers needed to propose a price that would attract the type of buyer who would purchase a house like this.”
“This house would not be purchased by an owner occupant, regardless of the price. It would be bought by an investor, and the price had to be low enough to build in an investor discount for putting up with the rehab hassle. The sellers agreed with that strategy, and it sold within zero days on market.”
There are three different types of strategies that are discussed in the book: discount for buy and flip (which is buying below market value and selling for top dollar), discount for buy and hold (which is useful for long term profits) and discount for buy and lease/purchase strategy.
“This is the author's favorite strategy because it eliminates many of the drawbacks to Buy & Flip or Buy & Hold and offers discounts of 10 to 20%. It employs the ‘renting to own’ method. This method transfers all repair and maintenance to the purchaser, while reserving appreciation benefits.”
The authors also list their “Six Golden Keys,” to buying investment properties.
“GOLDEN KEY 1 - Determine Your Minimum Investor Discount. GOLDEN KEY 2 - Define Good Properties. GOLDEN KEY 3 - Find Good Properties. GOLDEN KEY 4 - Determine Maximum Purchase Price. GOLDEN KEY 5 - Write Strong Offers. GOLDEN KEY 6 - Negotiate Well.”
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