What are the
different types of real estate investing opportunities?
While the rest of the economy is in shambles, and record
numbers of foreclosures make headlines, real estate investors are earning
thousands of dollars by buying and selling homes. How is it possible? It seems
that real estate investors know a thing or two about systems, strategies, and
styles of investing that the average homeowner does not. If you are a budding
real estate investor and you're looking to invest in homes but don't know how,
here are some of the basic strategies that investors are using.
SHORT SALE: A
short sale is when you purchase a home because the bank is willing to sell it
for less than what is owed on it. This happens a lot because banks know that
they cannot collect their entire lost amount if they have to bring a house all
the way through the foreclosure process. So you can buy a home for less than
what is owed, and re-sell it someone else for a profit.
REO: REO stands
for "real estate owned" and this is when the bank has taken ownership
of the property. When you buy the property, you are not buying it from the
homeowner but rather from the bank. The banks will often let homes go because
it costs them thousands of dollars to re-list and sell homes and they don't want
the non-revenue-generating real estate on their books.
Subject-to investing means that you are buying a home "subject to"
the existing financing. You get the deed to the home but the original owner
keeps the mortgage in their name. You take over payments of the mortgage and
ultimately sell the deed to someone else.
is where you buy a home inexpensively and then sell it to another real estate
investor. You might not make as much as if you fixed up the home and sold it to
a consumer but you can flip houses quickly this way.
is the well-known (and well-televised) strategy of buying an inexpensive home
and fixing it up to resell it to someone else. There is some time and money
involved in the restoration process but you can dramatically increase the value
of your investment.
well-known strategy to buy property and then rent it out to someone else.
Although there are headaches with this strategy, you get an ongoing stream of
monthly income as well as the appreciated value of the property over the years.
There are other types of real estate investing but these are
among the most popular and lucrative and investors are making thousands on
these methods right now.
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