“Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”

This is good advice as long as you don’t get so spread out that you are doing too many things but nothing with success. It’s important we understand the fine line between focusing on one niche without putting all your eggs in one basket, (so to speak).

To simplify the term real estate investing, there are really only three ways for investors to make money in real estate:

1. Real Estate Appreciation and Equity
2. Cash flow while you own it
3. Assignments: Payment when you flip a real estate contract without owning it.

So where do you start? Let’s try to answer this question on every aspiring real estate investors mind. Since real estate investing encompasses so many types of exit strategies or I like to call profit centers, it’s important to study and pick those you are most passionate about. In my Coaching U2 Profit Your Way training I thoroughly teach on over 24 profit centers, otherwise called exit strategies. The following is a summary of ten of the most popular real estate investment strategies with their advantages and disadvantages.

1. Rentals or Cash flow Investment Property: These types of investment properties are the ones which generate rental income. These are mainly apartment buildings and rental houses.
• Advantages: One of the easier ways to get started, and good long term return on investment while also earning monthly income.
• Disadvantages: Risk of not renting property leaving you with the mortgage payment and no income. Property management can be a challenge. You typically will wait awhile to sell your property so payoff is slow.
2. Lease Option. This is when you buy a property, then sell to someone else via a rent-to-own arrangement.
• Advantages: You get higher rent, and the buyer is usually responsible for maintenance. Cash flow can be good.
• Disadvantages: Most rent to own buyers don’t complete the purchase (this can be an advantage too, but it does mean more work for you). Bookkeeping must be done properly and can be complicated.
3. Fixer Upper Investment Property. These types of investment properties are the ones which are in ugly condition and need renovation. These properties can be acquired to flip after fixing-up quickly or held to rent out.
• Advantages: You can receive a quick return on your investment (months). You usually get below market value pricing on properties bringing you instant equity.
• Disadvantages: Higher risk. (Many unpredictable expenses come up in construction). You get taxed heavily on the gain when you sell in under a year.
4. Vacant Land. Many options including just holding while appreciating. You can also split it and sell it.
• Advantages: History has shown that land always appreciates in value (it’s the buildings on the land that go down. It is simpler than most real estate investments, with the possibility of great profits.
• Disadvantages: It can take a long time to increase in value. You have expenses, but no cash flow while you wait unless you sell the contract before closing.
5. Commercial Real Estate. These are any building containing 5 units or over and/or buildings sited for commercial use.
• Advantages: Long term triple-net leases mean little management and high returns. Lending is usually based on the value of the property vs. personal credit.
• Disadvantages: Commercial property valuation requires a more complex method, taking into account the income potential of the property. This is recommended for the more experienced investors as there is a lot more involved to set up and maintenance.
6. Buy property with Forced Appreciation. Buy in the path of growth and holding until values rise. For instance buying a lot in a residential development prior to roads being completed.
• Advantages: Can yield large profits, especially if you buy low to start.
• Disadvantages: Future price is not predictable – the market can turn, the developer can go out of business. You have expenses with no income while you’re waiting.
7. Preconstruction Investment Property: These types of investment properties are acquired directly from a developer before the construction or renovation is completed.
• Advantages: Low money out of pocket to tie up property while being built. If purchased in appreciating markets, you make money in equity at closing and can instantly re-sell at a profit.
• Disadvantages: You can’t always predict what a market is going to do. If market depreciates, you have lost money. Also higher tax rates in selling quickly.
8. Pre-Foreclosure Investment Property: These types of investment properties are the ones which you buy from sellers who are behind in their payments and may lose their property to the bank via foreclosure.
• Advantages: You have opportunities to buy properties at below value pricing – “Instant equity”.
• Disadvantages: Legal liabilities are higher. Finding these properties requires a lot research and footwork to find a deal that works. You can do all the work and still not have a deal with enough equity to profit after expenses to sell, (taxes, realtors, etc).
9. Assignments: This strategy has you get into a property at a discount, preferably with a known buyer in place before you commit to your purchase. After you are in contract to purchase a property, you would sell your contract for a fee to someone else. For example you get into purchase contract to buy a $120K property for $100K. You turn it to an investor for $110K and profit $10K cash without the cost and hassles of ever closing on the deal.
• Advantages: This is a great way to make quick cash with low or no upfront investment, low risk and fewer headaches from closing and ownership. This strategy creates a win win win outcome for everyone involved.
• Disadvantages: This will only work if the property you are buying has equity so that you may buy it a discount. In declining markets, this type of property is harder to find. Also when dealing with banks on REO’s or Short Sales you will find they will not allow you assign your contract. However, there are ways to get around this if you plan and handle the contract correctly up front.
  Do you want to know how I have managed to get around not being able to assign a contract? I have purchased properties in the name of an LLC set up exclusively to buy properties. I then sold the LLC to someone, making them the owner of the LLC, therefore making them responsible for closing on the purchase contract and end buyer of the property.
10. Flipping - Wikipedia defines Flipping as is a term used primarily in the United States to describe practice of buying an asset and quickly reselling (or “flipping”) it for profit ..

This description pretty much explains property flipping, with there being a slight difference from that description of flipping assets. In real estate you can get into an agreement to flip a contract you have gotten into before you even buy it. This can be done with ease when you know exactly what your buyers want and with no money out of your pocket utilizing transactional funding. Flipping can also mean closing and quickly reselling your property, sometimes even doing both transactions the same day – this being subcategorized a “double closing”.

• Advantages: My favorite strategy. You work the deal backwards. You create relationships with buyers who can close quickly with cash, (I mentioned earlier there is a system that does this for you at www.CashBuyers4Flips.com ). Then you find a property meeting the needs of your buyers. This strategy allows you to profit literally from no money down, with lower risk and very little of your own time.
• Disadvantages: The law requires you to disclose your intent to resell quickly to sellers. When dealing with banks, this can sometimes cause your offer to be rejected. You must buy properties in the name of an LLC in order to utilize transactional funding. Setting up and maintaining an LLC will cost you money. Though the intent of a buyer might be to close on the transaction, sometimes “life happens” and something causes the buyer to be unable to follow through. You may have to walk away from earnest money if you cannot find another buyer quickly

Now that you that you have learned strategies to consider, you will need to consider the type of properties you want to go after, developing a marketing strategy to find motivated sellers of those deals. Over the next months I will be sharing steps and strategies on how to profit investing in real estate 12 different ways.

Please leave a comment if you have anything you would like add to what I have written here with the heart to support fellow real estate investors. (Any solicitations for business will not be published) I appreciate the feedback!

Want to know a secret?

Would like to be in on a little known — yet highly profitable — niche in real estate with *next-to-zero* competition and involves NO houses or buildings of any kind?

This free video training reveals an exciting and easy way to make money in real estate buying raw land for, literally, pennies on the dollar.

Watch the video now:

www.JacksRealEstateSecrets.com

You don’t need money, credit or experience.

In fact, in the video you’ll see a guy who came to this country just a few years ago with a two suit cases, stacked with debt and used this very same strategy to become a millionaire.

His name is Jack Bosch and he’ll show you EXACTLY how he BUYS and SELLS 30 – 40 properties each month on complete autopilot for fast cash.

Some of these properties even produce monthly income, from raw land – its genius.

Yet it’s so simple in just 7 years he’s done over 5,564 real estate transactions just because this is one of the most overlooked and easiest investing models you’ll ever find. (In the video you’ll see PROOF.)

This unique system is unlike anything you’ve seen and frankly it’s the biggest hidden secret in real estate investing.

Jack’s revealing his ninja-like methods on this video, find out why.

Click the link below to watch the video now (and he’s giving away other cool stuff too):

www.JacksRealEstateSecrets.com

(And be sure to keep your eyes out for more
exclusive training in the next few days.)

Talk soon.

Tamera Aragon

P.S. If you want the exact road map for going from broke to millionaire in just 18 months like Jack did, in a niche that has virtually no competition, then you have to watch this video…

www.JacksRealEstateSecrets.com

Originally posted 2009-11-06 03:00:34. Republished by Blog Post Promoter

However, lately I have learned about a twist to an old strategy I had never done. Buying land and re-selling it via owner financing for a monthly profit and eventually a flip this property to another buyer. I think Jack Bosch, creator of the Land Profit System, who has closed over 5400 land deals himself, is on to something!

I have found the biggest stopping points for many of my Real Estate Investing Students are usually… #1 – The risk of getting into something they cannot find funding for and letting people down… #2 – Getting into a deal and finding out later something was missed causing financial loss. Many of my students are frozen stiff because of these fears. It is for this reason have listed some of the reasons a real estate investor might want to add land vs houses to their portfolio of investments following Jacks Land Profit System.

Why Land Flipping might be Better:

1. There is virtually no competition for land, especially rural land.
2. A lot of opportunity – There is an abundance of forgotten land out there
3. Cheap! You can purchase for literally pennies on the dollar.
4. With land you do not have to know as much about real estate like construction, termites, mold and all the other things of that nature that you must know when investing in houses.
5. Lower inspection requirements
6. Quicker closings
7. Less initial capital output (cheaper)
8. Buyers usually more savvy investors
9. Higher number of buyers are repeat buyers
   (Most house buyers are1 time buyers looking for a home to live in)
10. Good Potential for monthly residual income with your owner financing
11. Usually low to no upkeep
12. Usually low holding costs (No fire insurance, fix up, maintenance)
13. Very low, (or sometimes none), acquisition costs
14. Lower risk – no money down to lose

Why Houses Flipping might be Better: (May be a shorter list – but they are worth more $)

1. More potential to generate income while you hold it – owner financing OR renting
2. Everyone needs a house since shelter is a basic necessity of life.
   (Not everyone needs vacant land – smaller # of potential buyers)
3. Potential to profit big doing just 1 good deal (For Land Profits following Jacks system, on average, you must do more deals to profit higher dollars)
4. Potential for higher monthly residual income per property
5. A lot more home owners in desperate situations than there is who own land ( Land has lower costs to maintain and there are less vacant lots than there are houses generally)

Look for these Market positives when investing in land OR Housing:

• Unemployment rate is low compared to the national unemployment rate
• The general area and its population growing and expanding
• And if it is, best if expanding in the direction of the property you are interested in
• Talk to the city and county planning and zoning agencies where the land is located; they will be able to give you valuable information about area growth and building projections.
• Be sure to keep your ears open for news of major business expansions.

Here is How to Lower Your Risks for Houses or Land before closing on any deal:

• Make sure title is not “cloudy” and property is marketable. Remember IRS liens have to be paid! If you buy a property with those liens, that bill becomes yours. Do your due diligence in running a title report before closing.
• Run necessary tests and inspections depending on specific area and property
• Check with County to verify no complaints or notices for required repairs are filed
• Make sure you work with escape clauses to assure you can walk away for any reason.
• Avoid giving check or cash money down until you are positive you are going to close.
• Make sure that your purchase contract is worded in such a way that it allows you to only transfer cash at the time of closing.

Land and House Flipping Similarities

In summary, you can follow a lot of the same strategies marketing to land owners as I always have buying from and selling to home owners. The best type of deal, whether land or houses, is when the seller, for one reason or another, wants a quick easy out of the obligation of owning their house or land – leaving you the opportunity to buy at a discount and profit in the short and/or long term depending on your goals!

Real estate investing, just like most things in life, has benefits and risks no matter how you look at it. There are always those unknown and unexpected circumstances. In the scheme of things, you need to decide… are you able to live a peaceful, joyful life as you are building your wealth through real estate investing in land and/or houses. Your personal risk tolerance is what only you can decide. I am doing both wholesale land and house flipping and holding, looking at each deal individually. Because most importantly, it is all about profitability and the bottom line!

Most Important!

Universally – having a system, a trainer and a coach to take you down the path of real estate investing is the key to your success. Someone who has already blazed the trail…and all you have to do is follow. You want to walk along side a real estate investor with the experience in doing it successfully – someone who has already figured out the “code”. “Why re-invent the wheel?”, as they say.

Knowing you have experience at your side alleviates those fears of the unknowns increasing the chances for a faster, easier and happier ride to the peak of real estate investing success.

I would like to leave you with a quote: “Perhaps the very best question that you can memorize and repeat, over and over, is, ‘what is the most valuable use of my time right now?’” - Brian Tracy: Author and speaker on personal and professional development

To Your Massive Passive Profits!

Tamera Aragon
REI Success Trainer, Author and Coach
http://www.blog.TameraREI.com

For the best training on how to profit from buying land for pennies on the dollar go to: http://www.MassiveProfits4REI.com/Jack

6 Month Coaching & training on wholesale flipping through short sales and REO’s and more http://www.CoachingU2Profits.com

Originally posted 2009-11-16 11:26:23. Republished by Blog Post Promoter