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How to Make Money in Real Estate Investing?

There's no huge secret to making money with real estate investment. All it takes is some study, some preparation, and some elbow grease.

These days, when people talk about making money with real estate, they're generally talking about the practice called 'flipping houses'. Investors buy property below market value, fix it up, and sell at or above market value. Depending on how good a bargain you got in the first place, and how good a deal you can drive when you're selling, you can realize anywhere from thousands to tens of thousands of dollars in profit on every deal you make. In order to do that, though, you have to know how to find good properties at low cost, where to get the best terms on loans, what improvements will net you the most increase in value and how to sell for a high price.

Finding Low Cost Properties to Buy

  • Read the legal listings and find foreclosure notices. You can often buy a property that needs little fixing up from an owner facing foreclosure.

  • Attend foreclosure auctions, and tax arrears auctions. Those are also announced in the newspaper legal notices. Keep your eye on them.

  • Get to know a few good realtors. They can often steer you toward owners who have to make a quick sale and are willing to take a lower price for ready cash.

  • Know your market - from the inside out. Neighborhood/local knowledge can help you take advantage of unexpected 'blips' in the real estate market. An example: you'll find people looking to sell a house few months after a major company closing.

Tips on Getting the Best Bargain Price

  • Learn to recognize a good investment property - one that needs only minor cosmetic improvements, and is in a good neighborhood.

  • Learn to negotiate without being condescending. People would rather sell to someone they like - so be friendly, helpful - and firm on your highest price.

  • Get pre-approved for a loan so that you can offer a quick sale. Having your financing all set can be a major bargaining chip when someone needs to sell fast.

Invest Improvement Money Well

  • Attend to the basics. Deal with minor repairs (you wouldn't buy one that needed a major overhaul, right?) and cosmetics like paint, floors and trim.

  • Know which improvements will pay off in increased value for your property. In general, kitchen pick-me-ups are your best investment.

  • Study home decorating and design magazines for color and decorating ideas. Keep the decorating spare, but attractive.

Get Your Highest Price

  • Sell at the right time. Spring and Summer usually brings out home buyers who are looking to get into a new home before school starts - it's a good time to sell.

  • Be prepared with an arsenal of non-cash inducements. Offer to pay closing costs, provide your own inspection to save the buyer money, or include fixtures like air conditioners or appliances in the sale price.



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