Real Estate Investing Choices

In our ever changing markets Real Estate investing is not for the weak of heart. It can be stressful, but it can be rewarding as well. It is usually the new investors that find it the most stressful and that has more to do with lack of knowledge and experience then ability. But it is a great time to be a real estate investor as good deals are everywhere!


So where do you start? Most important is to decide what type of an investor you want to be. There are a number of ways to invest including wholesaling, rehabbing and commercial.

The easiest and quickest way to get into real estate investing is to be a wholesaler. A wholesaler is an investor that buys and sells, or assigns, properties that are usually 30-50% under market. As a wholesaler you can locate properties, put them under contract and assign them to another investor to either fix and flip or hold as a rental. You make your money on the assignment fee. Wholesalers can also have others (bird dogs) bring deals to them. One of the best free sources for wholesalers is word of mouth. Being a friend of a postal worker in the area you invest is always a great idea. They know who's moved and who's getting lots of notices from their mortgage company. So cultivate those friendships and watch the leads come in.

If you're not ready to try wholesaling you can become a "bird dog". A bird dog is someone who finds good deals and turns the lead over to a wholesaler. The bird dog will usually get paid if the deal is put together and closes. Some wholesalers will also take you under their wing and teach you the ropes if they find you are sincere and have a talent for finding the deals.

A Rehab or Fix and Flip investor usually buys the type of homes that wholesalers have. The homes are well below market but in need of some tender loving care. Once they are fixed up they are sold to a retail buyer usually just below market value. The quicker you can sell them the more money you'll make. Being a rehab investor can be very gratifying if you are like me and enjoy watching the transformation you have created. The down side is it takes time and money to do the fix up. And one thing I've learned through the years is it's never as cheap to fix it as you hope it will be. Things always seem to pop up that you didn't budget for. So to be on the safe side always add an extra 10-15% to your rehab budget. And don't forget about holding costs!

Commercial or multi family investing is a more specialized area of real estate investing and should not be undertaken without guidance. Commercial property is evaluated very differently then a single family home. However, it can be quite lucrative when done right. So make a decision and learn all you can then just go out and do it!

By Helene R


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