Many people who are looking for extra income are now looking into real estate investing. With home values increasing, it is an excellent way to earn extra cash, and possibly a gateway to a new and profitable career. You just have to learn the ins and outs of the business.
I would suggest starting out with residential real estate, which is something that most people are familiar with. If you are good with your hands or know someone who is, you will start off with an advantage.
When you are first starting out with investing in houses, you should always look for ugly or bad houses that need a moderate amount of work. These homes are much cheaper to purchase, although they will take some work to improve. You should start out by looking for houses that need some work, such as clean up, painting, and in some cases new carpet. You don’t want to buy something too run down, as it could cost a fortune to repair.
As I stated earlier, if you think of yourself as a handyman and feel that you can do the repairs yourself, you can save a lot of money. On the other hand, if you need to hire someone, you should always make sure that the individual or company that you hire is qualified to do the repairs. If you aren’t comfortable with doing any of the repairs, you should inquire about a subcontractor or company that will do it for a reasonable price, or perhaps a share of the money once you have resold the house.
If the house you are thinking to purchase and resell has any type of structural problems, you should always get an estimate from a reliable contractor before you make the purchase. If you decide to stay in the business, you’ll learn a lot more over the years, although you should always hire a contractor when you first start out. Once you get all of the estimates together, you can make the final decision on how much of an offer you want to make on the property. You should also make sure you can obtain mortgage financing on the house, unless you are able to pay cash.
After you have a team together and successfully renovated and resold several homes, you will begin to feel more confident with buying homes that need repairs. All it takes is time and practice – and you’ll be buying homes that the average investor wouldn’t think twice about. This can be a huge advantage when you are looking for homes to buy and resell, as there will be less competition to worry about. You’ll also be able to get a lower price when buying the home, simply because you can use the cost of the repairs to your advantage.
Once you are able to do repairs on homes, including structural problems, you’ll have a huge advantage in the market. You’ll be able to buy virtually any home, including those that other investors choose to ignore. Doing so can be very profitable for you, especially if the house is in a well known and well desired neighborhood. After you have done the repairs, you can resell the home for a much higher price than you paid to acquire the property.
When you start looking for houses that you can repair and resell, you should always take your time and buy the right homes. You won’t have the money, time, experience, or support to buy the bigger houses at first, which means you won’t have room for mistakes. Once you have purchased and resold a few smaller homes, you’ll eventually be able to work your way up to the bigger homes – which is where the big profits will come into play.
Always keep in mind that when you first start out, you’ll need to take things slowly. You can’t expect profits to come overnight, as it will take you some time to learn. Once you have been at it a few years and have several houses to your credit, you’ll be ready to tackle anything. At that point – you’ll make a lot of money in a career that is truly exciting.
Lester Bleich, New York State Licensed Mortgage Loan Originator 