The Progression of a Real Estate Investor

The Progression of a Real Estate Investor

Posted on 30. Nov, 2010 by in Real Estate

Few people have not heard of the multiple advantages of real estate investing.  Right now property is cheap, there’s a wealth of information out there on how to do it, and with the recent concern about retirement and financial security, a lot of people think the time is now to start taking their income into their own hands.

Real estate investing appeals to people over other investments because it is relatively risk free, contrary to popular opinion it does not take a fortune to get started, and it has the possibility of cash flow or passive income.

If you’ve already been convinced to start investing in real estate you may be wondering how to begin.  The answer to this question varies from individual to individual.  If you have a lot of money already (say over $100,000) to invest with, you are in a completely different position than someone on a tight budget.  If you’re just starting out, the best way to break into the industry is through wholesaling.  For finding gold mine deals for 50% market value, you’ll be rewarded with a couple thousand dollars when you sell another investor the contract.

Having done a few of these deals (you can find more information online by doing a Google search for “wholesaling property,” you’ll have worked up enough capital to start actually buying some property.  You’ll use the exact same approach except now you may be taking leads from wholesalers and you’ll have to do fewer deals to make a profit.  Most investors invest in single family homes for a few years before moving onto multifamily real estate investing or hard lending.

Both of these are much more passive than rehabbing property.  In multifamily residential investing you can do a lot less work by hiring a property manager and taking advantage of economies of scale.  Hard money lending is when investors lend money to rehabbers at high interest rates and just collect the checks.

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