Are you investing in real estate? Have you thought about flipping, renting, or wholesaling homes? Lately I have been reading a lot about how to make money from real estate. It got me thinking that this is something that I really want and need to do if I want to gain more wealth.
The problem is that I’m not really familiar with what I should do. Sure I have done more than my fair share of reading and asking questions but we all know that’s not the same as taking action. Though we just purchased a home a few months ago I feel like there is no better time to get started then now, like right now.
Why Investing Real Estate For Wealth
One of the reasons I thought about investing in real estate is simply because it seems that most wealthy people gain wealth from owning a business, stocks, and/or real estate. Since I am already invested and stocks and just started my business I figure real estate is the only thing left.
That and the fact that there are so many ways that I can make money from real estate. From buying and flipping homes to wholesaling to even becoming a landlord it just seems that the possibilities are tremendous. Real estate in some cases could give me a large lump sum of cash or even the semi-passive income stream for years to come. We all know there is nothing better then passive income just ask Pat Flynn.
So Here’s What I Have Found So Far About Real Estate
Like I said, for awhile now I have wanted to get into real estate and either was just to scared or didn’t have the knowledge to do anything about it. However, I have heard about people with no credit or money still getting into the business. What that meant is that I had to stop making excuses and do something.
There is a lot of information out there and most of it is free. People are genuinely welling to help you if you ask questions and are willing to listen to advice. Just like blogging you need to find your niche and become good if not great at it. Money is being made by the millions and people are getting wealthier each day all while I sit and wait.
My Options for Getting into Real Estate Investing
Here is what things are looking like for me these day when it comes to becoming a real estate investor. I found to people that are willing to front me money so that I can get into the business.
One guy is an investor and he is willing to loan me up to 70% LTV (loan to value) of the property at 14% interest only with four points at closing. That was the first option and it was better than nothing. My second option is a real estate investment club and they are willing to loan me up to 65% (with no points on top) of the LTV and a rate of 10%.
What I would like to do is find short sales with my area that require little work and then put them back on the market for a quick flip. In my area homes are going quick especially for the homes under 100k. I would need to find a general contractor (GC) who can do the fixing up and make the house look great.
What About Flipping the Homes After
See is the thing is that I have that part almost figured out and set up already which is way I really need to get started. I have several realtor friends who have approved buyers but the are FHA loans. Most of the homes here that are being sold, the seller wants to deal with cash or conventional loans only.
My plans would be to buy the home fix it and then flip it to one of my friends who already have clients waiting. Not that they are any guarantees that they would get it but at least I would start out with potential buyers before the general contractor even finishes the home.
Not Ready to Be A Landlord Yet
While I could certainly make money in real estate by being a landlord I don’t want to start with that from the jump. With so much going on and the money that would be required to buy, fix up and then rent it would make it almost impossible for me to do. On top of that the only way I would be able to get a home would be if I bought it cash. Since I no longer work the normal 8 to 5 it will be two years before I could get approved for a regular bank loan.
Are You Investing In Real Estate?
If you are currently invested in real estate do you have any suggestions? I don’t know if this is the best way and I know for sure its not the only way. This is just what I have come up with that doesn’t require me to spend too much cash up front.
I am looking for a way that will allow me access to real estate as I really believe that as David Carlson mentioned – Want to Be Wealthy? Own Something! Now DC could have been talking about businesses or other things but I still think it holds true in this case as well. Owning real estate is definitely a way to building wealth.
My plan is to flip a few homes, stack the cash then buy properties that I can then rent and become a landlord. This will give me cash on hand for other deals later on down the road and the rental properties will give me the passive income stream I need and want monthly.
What do you think about my plan? See any flaws that I need to fix? Any suggestions on how to get into the business another way? If you are in real estate how did you get your first deal done?