One of the most recommended ways for building wealth in a stable manner is through real estate. Although the market tends to go up and down in waves, it’s often those who stick to their assets that end up on top. Let’s take a look at what a real estate investor does.
Investing In Properties VS Brokering
One primary difference to note about an investor vs something like an agent is that an investor buys for their own benefit. An agent is generally just a broker or middleman for a buyer and seller. They make a commission being an expert in this particular field, but they don’t invest or make money on their own properties.
An investor, however, buys properties with the intention of remodeling them and making a return on their investor when they sell it to a buyer that’s looking for a new home for their family. They aren’t a middleman, they are actually purchasing and taking ownership of the property until they sell it like any other homeowner.
The Financial Strategy
Real estate investors have 4 primary methods of generating a financial portfolio through the market.
Some investors get to a point where they’re just a money lender. They lend money to the person who is going to buy the home and rehab it, in exchange for interest and a cut of the sale price when it’s all said and done.
This investor is a little different in the sense that they don’t purchase the property on their own, but they contract with the homeowner to find an investor who will purchase it in cash. They put their fee on top of purchase price in order to make profit.
The rehabber is the one who will take a home, calculate and perform renovations on it in an attempt to make a decent sized profit once it’s finished and sold to a new homeowner. This is the “house flipper” you mostly see on TV or hear about.
Buy and Hold
This is an investor who’s in it for the long haul. They buy homes, usually duplexes or multi-family buildings, that will generate cashflow over a period of time. Sometimes they’ll sell the property in order to trade-up into a larger one, thanks to tax benefits, but in other cases they’ll simply own multiple buildings across town. They focus on monthly recurring income vs big payouts from a flip or a wholesale.
These are some strategies used in the real estate world to get you started. But there’s a LOT more information once you start diving into it all. You can find more in-depth information on each of these methods over at the Real Estate Marketing Hub.
Information in this article provided by Sell My House Easy Fast Home Buyers.
You can check out this video over at https://www.youtube.com/watch?v=uKMtA504nYw.