Some people choose to do it as a profession, others do it as a hobby, but one thing they all have in common is the desire to profit from it. `It` being the buying and selling of houses, or as some term it – house flipping. In other words – speculating.
So, with the current downturn in property prices, and the upturn in foreclosures, is it a good time to invest in property? What factors should you bear in mind if you are thinking about buying and selling houses?
Consideration of the following, though not an exhaustive list, should give you some guiding principles to help you before jumping in to real estate.
From what source will you find the funds to purchase the property? If it is going to be a bank loan, consider the rate of interest you will be paying the lender until the loan is repaid, usually at the point of the sale of the property. If it is your own money you are using, how much interest will you lose on it being in a bank? Might you need that money in an emergency?
How much are you prepared to buy the house for? The higher the value, potentially the greater the profit. Set yourself a ceiling, particularly when first starting out. Where will you look to locate the ideal property you wish to buy? From an auction, through a realtor, or even privately, are some of the more obvious options.
Once you see a house you think you could do things with, check how much similar properties go for in that neighborhood. Pay too much and if you can`t make sufficient profit you are wasting your time, and you could even lose money on the deal.
Will you be carrying out repairs, or remodelling, yourself, or, will you have to bring in contractors to do the work for you? If you do the work yourself, do you have the necessary expertise to carry out the work safely, and do a proper job? What about family commitments, will you have the support of those closest to you? If you can do the work yourself, or at least the majority of it, you can save yourself a lot of expense. But, you need to consider whether you can afford to take the time off work with the possibility of losing wages. You need the commitment to see the job through, and set a realistic time scale for completion.
It is absolutely essential to calculate how much profit you will receive after taking into account the initial cost of the property, interest on any loan needed to fund the purchase, selling costs (realtor fees, legal costs etc.), your own wages for the time spent on the house, and costs of materials and possibly employing a contractor to do any work needed to add value to the property.
If you have ticked all the boxes and feel confident that buying and selling houses is for you, then you could be on the road to making money in the property market.
Geoff Cummings
http://www.articlesbase.com/business-opportunities-articles/how-to-profit-by-buying-and-selling-homes-723326.html
25 years old looking to get into buying and selling homes for profit, no idea where to start?
I’m also interested in being a land lord and owining serveral properties. Do I need a license, home buying classes, or what?
Go on ebay and buy one of those Carleton Sheets Real Estate courses?
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Good for you! You have made a smart decision. Buying and owning real estate is the best investment you can make in your life. Now realities: you should use a Realtor to help you select the homes and you should you a Realtor to sell the homes. If I’m going to invest money in a project, I want the best people working for me, right? They are Realtors. Here’s a tip, find a Realtor with at least the GRI designation, better the CRS. Also someone you has sold some investment type properties. Buying and selling real estate as investment properties is a different ballgame than just buying a home to live in. First, you typically need some capital to start. Because banks consider this a business transaction, the costs up front are higher. It’s riskier. You need to demonstrate you have a workable plan to resell these properties at a profit. That’s just a tip of the ice berg. Now don’t be discouraged by what I’ve told you so far, there is much more that I haven’t told you, but you need to learn a few things on your own. Good Luck!
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I don’t know if the caroten sheets real estste courese are the answer neither am i kicking against someone elese opinion but i’m 24 years old and have been trying to get into tealestate lately and I do know that for wahtever state you live in it is different and to answer your question you do lave to have a sales liscense. but hey here is an web adress that can assist you a little further and like I said each state is different this is the state in which i live and you can call any number on this page and they can assist you with the information for your state or at least how to get it the web address is http://www.mrec.state.ms.us also a scool for realtors is http://www.webschool.com
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I’d recommend starting slow and learn as much as you can from experts doing what you want to do. A good organization to join is The National Real Estate Investors Association http://www.nationalreia.com/. Use their website to find the local chapter of REIA operating in your area and join the group. Then go to the meetings and start your education. Find a mentor(s) and learn, learn, learn. Real estate buying and selling can be very profitable if you know what you are doing. Take the time to educate yourself before you make your first investment.
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No. You don’t need a permit, license or anything. You just need to know when and when not to purchase a house. You need to study about what to look for as far as maintanace a house might need if you buy it. Know the costs of certain things and when to flat out avoid a property because of the improvements it needs. Every house will need SOME maintanace, but you don’t want to buy a "money pit" that you will never profit from.
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No, you do not need a license to buy, sell or manage your own property. In fact, when flipping homes, it’s better if you don’t have a license for the liability issues. Because I am licensed, I have to be extra careful to make sure that I do not do anything that I can be sued for.
You bring up two investing strategies. Here are the best way to approach these with little or no money and no credit required:
1. Buy and hold (buying property to rent them out):
Look into something called a PACT trust. You’re looking for people who can no longer afford to keep their place and are unable to sell it because there is no equity and the rental comps come up a few hundred short every month to justify renting it out. You put the property into this trust and bring in a rent to own buyer. You will profit on the monthly payments and the final sale price. You could also hold onto these properties hoping that the appreciation out performs the negative monthly cash flow in the long run (which it should).
2. Flip (buy and sell): Finding undervalued property and placing them in an assignable purchase option contract and selling that contract to someone else.
To learn these and other strategies, visit your local bookstore under real estate investing and maybe join your local real estate club: http://www.reiclub.com
Regards
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Satar Naghshineh
satarnag@amirifinancial.com
http://www.amirifinancial.com
California Licensed Real Estate Broker and Investor
Take a real estate course. Do a web search for "real estate schools," in the city where you live.
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