Investing in Real Estate – A Survivor’s Move
They say that the survivors are those who know how to adapt to any type of environment. When it comes to investing in real estate, only those who know how to change their strategies will survive such harsh tests as a recession. That is why real estate investors are changing position and redirecting their capital. The way to go today, at a time when the economy has yet to fully recover from a slump, is short-term real estate investing.
These are investment methods that give much faster returns than the usual “buy and hold” method in which investors buy properties and age them before selling them for a much higher price. Real estate appreciates over years, so you’re bound to make big profits over time. But if you don’t have time, there are “quick cash” investment strategies that are effective in current market conditions.
The most common short-term methods of investing in real estate today are home rehab and wholesale. Rehabbing, also known as fixing and flipping, is buying property cheap, fixing it up, and selling it for a profit. This business is boosting today due to the relatively low prices of real estate.
Rehabbers can fix and flip more properties because they can buy houses today at bargain prices. Their favorite projects are known as superior houses to fix or special for handymen. These are cheap properties in need of repair. Some of them were abandoned by their owners for years, while others were sold because the owners were in financial difficulties.
In addition to top homes to fix up, rehabbers are also buying REO homes. These are properties that were repossessed by lenders from homeowners who owed them mortgages and other financial obligations. REO homes have already been foreclosed, so all liens and claims against them are removed. This further lowers their prices. Those who invest in real estate can buy property for pennies on the dollar today.
A rehabilitation project generally takes from a few weeks to a few months. The schedule depends on the repairs required and the time it takes to sell the property. When it comes to profit, a $30,000 paycheck at the end of each project is all too common.
Meanwhile, the wholesale home sale lasts only a few days. This is placing a property under contract to buy it. Next, you’ll find a buyer and assign the contract to them. In wholesale houses, paychecks of at least $5,000 are basic. Since you do not need to buy a property, you will not need a large capital in this business.