Real Estate Investing Reality
It is possible to make money through the use or exchange of real estate. Anybody can do it. Look at my yacht, mansion, and gaggle of beautiful women around my pool. Don't you want to be like me? I know the secret and will sell it to you and you can be like me!
There are large businesses built around the premise of teaching anybody how to get wealthy through investing in real estate. These guys are on late night infomercials telling us that for the low-low price of too much money they will give us the secret that we can use to get stupid rich playing the real estate game. If these secrets really did work these guys wouldn't have to advertise late at night nor would they charge you to get it. Real wealth in real estate is very possible and there is no secret. Any professional real estate agent can help you get involved and they will do it for free because they are rewarded only when you get what you want.
Many Popular Ways to Make Money with Real Estate
Real estate is a limited supply resource that is currently restricted to the Earth and the dry continents and islands upon it. If you own any parcel of this available supply, there will be a demand from it at some point in the future. Everyone has heard that, in real estate, location is everything. The only thing no one can tell you is where that is going to be. Consider the poor farmers of Southwestern Delaware County in Ohio. Since the founding of these few small towns outside of the capital city in the mid-eighteen hundreds, families have owned land that was desirable only to their neighbors or heirs. Everything changed in the 1990's. The explosive population growth of Columbus leaked out into these small communities. All-of-the-sudden these poor farmers were able to sell their land to the highest bidder. The population of Dublin, Ohio went from 3,500 to over 30,000 and land prices went from $2,500 per acre to over $100,000. What a great way to make money in real estate; buy it and make the best use of it until demand grows to a point that causes your land value to exceed any semblance of normal expectations.
Flipping is a term that many people think of as a way to make money in real estate. I am speaking of the flipping of houses as the process in which someone buys a home below market value, they fix it up and sell it for a profit. There is nothing wrong with making money in real estate in this manner. I would suggest that you really do your homework, though, and discuss your entire plan with your Realtor because too many people overlook the details involved in real estate and end up spending so much money getting the house just to code that they find themselves selling it for no profit or renting it and getting into a whole new situation that they never intended to.
Buying a home to rent is another common thought as to how people can make money in real estate. Once again, a proper, long term plan of acquisition, rental, and disposition is needed before you buy your first rental. Without a plan or discussion with your Realtor, you may find yourself with inadequate monthly income to cover your costs, an inability to rent due to overpricing or under-improvement, or you might go for years thinking that all is well only to discover that you haven't planned well enough and now own a money pit.
Other Real Estate Investment Vehicles That May Be More to Your Liking
If you are interested in making money in real estate, you should begin with a professional Realtor. A top-notch agent will help you to build a long term plan to enter and exit the market. They can also help you to assess your capabilities for involvement and risk which are important when deciding which direction you go. Once you have picked your involvement (flip, rent, REIT, capital venture, land bank, farm land, whatever) and have an entry and exit plan, your Realtor will help you to put together your personal team of professionals. A wise investor does so with his eyes open, and your real estate agent can help you see things clearly.
You Too Can Make Millions in Real Estate!
So, you met with me in the Spring of 2014 and I helped you put together a plan and a team. Remember how I explained the pitfalls of flipping and showed you the potential in venture capital investments in farm land? You jumped in with only a little bit of money but stuck to your plan and in 2018 you came to me to help you invest in more real estate. I helped you understand vacation properties and introduced you to some new team members. I do appreciate you letting me use the lake house once-a-year, but I am even more excited to hear that you are ready to 1031 exchange up. More explanations and introductions and you now own a historic building on the square downtown. It was good to hear that the city has plans to cover your renovation costs, this means that you will soon be exchanging again and further protecting your investments. It amazes me that you could liquidate to the tune of over a million dollars and it all began with a conversation.