It depends on what your goals are.
Are you looking to own some property and have them long term as income producing property?
Are you looking to buy a home, fix it up, and flip it?
Making money investing in todays real estate market, starts with finding pre-foreclosure properties that are going to become a short sale, this allows the buyer to get the property at a discount.
When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due.The key is to get the lender to accept a short sales or discounted payoff.
Things to consider when buying a short sale, first its best to call the lender, submit a letter of authorization that includes the property address, loan reference number, name, date and agents contact information.
Submit a preliminary net sheet that estimates the closing statement, showing expected sale price, cost of sale, unpaid loan balance as well as RE commissions, most lenders will also require the homeowner to write a hardship letter inorder to be able to sell the home in a short sale.
Investors that work with a short sale can look at securing the home for resale in 6 to 8 months once the bank approves the sale.
Comparative market analysis will determine property values of similar homes in the area.
The best way to invest in real estate is to buy short sales.
I agree that it depends on your goals. If you want minimal risk, buy high-end properties and rent them seasonally to snowbirds in places like Arizona, southern California and Florida. Rent only to people who can take care of the properties, and be very hands-on with them. Use only short-term leases and check the properties every time the lease is up to ensure minimal damage.
When the properties appreciate to a level you're satisfied with, sell.
And don't allow pets.
Very carefully. Look for the "up" side in property. Too often the unknowing buyer is easily lured to the property with full occupancy thinking this is a sign of a very good investment. A closer look at the financial reveal that while the property is fully leased, the recovery is low. Two factors quickly come to light indicating the rent is too low or the expenses are too high. Property owners like to get a property fully leased and then ask an above market price hoping the investor is not savvy and looking at the numbers. Also, looking at the numbers in terms of the financials/expense, etc. is not enough. You must be familiar enough with the operations of a property to recognize how comprehensive the financial reports provided really are. This is especially true when looking at commercial properties in that there are not as many consumer safety nets built into the laws and regulations as are present in residential properties. If you have little or no experience, find a reputable broker who will work within your desires and not pressure you into a purchase. Remember, property is like any business...positive cash flow is an absolute necessity. Good luck! WB
The best investment is your primary residence. Solves the housing need, you receive the tax benefits, it contributes to your quality of life and in most cases these x factors have a monetary value that will contribute to your ROI when you sell. Buy with a low down payment to increase your ROI
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