Real estate has always been one of the best investment options of all times. Real estate has always provided the best ROI to investors if done with knowledge and insight . But not everyone has in-depth knowledge about this sector and the ways through which one can earn from this sector. Although there are good real estate advisors like the Sands Investment Group etc., the online content for it is so much and so complicated that people don’t get the correct advice and invest in wrong deals and lose their hard earned money. So in this blog we would be learning ways through which one can invest in real estate and earn from it.
You put a property under contract for a very low price. You sell/assign the contract, usually to a rehabber, for somewhat more. In the $500,000 example above, the wholesaler might have put the property under contract for $300,000 and assigned the contract for a total of $325,000—$300,000 to the original owner and $25,000 to the wholesaler. Wholesaling can give you the most money per time spent. (Rehabbing will give you the largest paycheck, but will take longer.)
Some would argue that this is about the only true way to invest. You buy a property and then rent it out. Usually, the goal is to maximize cash flow—the difference between your payments and the renter’s payments. However, sometimes there’s a two-step strategy. The first step is to pay off the loan as soon as possible (even if there’s no positive cash flow), and then end up with a free-and-clear property you can rent out for a really large cash flow.
Commercial real estate:
There are lots of variations here, too. We won’t get into them all. But one popular technique is to buy an apartment building. Fix it up some, raise the rents, and find additional revenue streams. Then—because commercial real estate is usually priced as a multiple of the income stream (often using what’s called the CAP Rate)—you’ve substantially increased the value of the building. You hold it for a few years for the cash flow and to establish a history with the higher income.
This is a great way of investing in real estate and earning from it. Rehab the property with the intent to make it a rental.
Rehab the property with the intent of selling it. This is the technique shown on a lot of reality TV shows. The goal often is to make a 20% profit on the resale price. So if you buy a property, rehab it, and sell it for $500,000, many rehabbers will have a goal of approximately $100,000 in profit.
So here are some different ways through which you can invest your money in real estate and earn a good ROI from it. Real estate would always be a earning option for you if you do it correctly, timely and smartly.