Home » Real Estate

The Top 3 Real Estate Investment Strategies

Jan 16, 2008
There is a lot of information out there about real estate investing. This information can be sometimes confusing, because it is never really clear what the best investment strategies are. This article focuses more on the best strategies that will work in the current real estate market. This is a biased market skewed more towards buyers. There are many homes for sale out there, however, they have very few people currently looking for a home to buy. Therefore, every investor in the market today needs to use those strategies that are most likely going to succeed in this market. He or she needs to focus more on strategies that are most likely to attract buyers or renters to their properties. Here are the 3 best options.

1. Buying for long-term hold: this involves buying a property with the intention of renting it out for several years prior to selling the property. They real estate investor in the situation looks for homes that have been deeply discounted, buys these homes, and then turns around and rents them out with positive cash flow. Their goal here is to make at least $200 a month after paying all of the expenses, which include the mortgage payment on the home, taxes, insurance and any other expenses related to maintaining the property. The advantage of using this strategy is that the tenants end up paying down the mortgage for the landlord. The home builds equity with time and is eventually owned free and clear by the landlord after several years of renting the property. The key here is to buy the property at a discounted price and rent it out with positive cash flow.

2. Buying for short-term flip: this involves buying a property at a great discount with the intention of selling it right away for a quick profit. The investor here buys the property with at least a 30% equity. He or she then turns around and sells the property to another investor leaving a 10 to 20% equity for the new owner. This is called wholesaling. This strategy used to be very popular a few years ago. It is still being used today but it's not as popular as before. The key here is to buy the property only after you have already located a buyer. The best way to do this is to build an e-mail list of potential buyers. Another option is to borrow a list from someone else. Here is the step-by-step process: you build an e-mail list or you locate the list owner, now you locate a property with significant equity, you collect details about the property and send out an e-mail to your list, you now close on the deal and then turn around and sell it to the end buyer for a profit.

3. Using the lease purchase as an exit strategy: in this situation, you are buying a property with the intention of renting it out for one or two years prior to selling it. The first step here is to buy a property at a discount. You then locate a buy/renter who signs to agreements: the first is a lease agreement for about two years, the second agreement is an option agreement. The buyer has the option to actually close on the deal within one or two we years. The investor cashes out at the end of the option agreement. The advantage of using this strategy is that you get very good tenants who actually take care of the property while paying a higher than usual rent. Thus you get positive cash flow and you serve the property at a huge profit within one to two years. This is one of the best options in the current market conditions.
About the Author
Eric Mabo is a Real Estate Consultant , who specializes in locating discounted foreclosures.
Rating:
Please Rate:
(Average: Not rated)
Views: 139
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Accounting
    • Credit
    • Currency Trading
    • Debt Consolidation
    • Insurance
    • Investing
    • Leasing
    • Loans
    • Mortgage
    • Mutual Funds
    • Personal Finance
    • Stock Market
    • Structured Settlements
    • Taxes
    • Wealth Building
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources