What Is Real Estate Investing?

Real estate investing involves the purchase of real estate for profit. Profits are accumulated by renting out properties in a cash flow method, or the property can be improved, rehabbed, and resold for a capital gain. Capital gain can be deferred through an instrument called a 1031 Tax Exchange.

What are the advantage of real estate investing?

There are many gurus that will tell you that real estate investing is a panacea where you cannot lose money. Although this is false, there are a number of advantages to investing in real estate.

The first big advantage is that real estate is an extremely expensive product. Each sale you make generates more profit potential for this reason.

Leverage, or the ability to borrow based on the value of the property, is probably the second greatest advantage. It is much easier to finance real estate than any other product. While investing in most assets requires the purchaser to have the full purchase price available for the asset, in real estate investing, one only needs to have a fraction of the purchase price available (like 5%, 10% or 20%) as a down payment. Therefore, real estate, although incredibly expensive, is still easier to buy than say, a piece of industrial equipment of the same value.

Local advantage is rarely discussed but it stands to reason that you know your neighborhood better than a real estate investing expert would if they were in another part of the world. This creates an advantage the beginner can exploit in his market.

In brief, real estate investing is worth exploring. The bulk of the worlds assets are in real estate. Common people everywhere own it and are giving it up in foreclosure, sickness, death, job transfers, divorce, or an inability to maintain it or pay tax on it.

The best way a beginner can get started in real estate investing without taking on any personal risk is to 'bird dog', or hunt for good deals, for another more experienced investor. This is an excellent strategy because it allows the beginner to learn the most valuable skill an investor has: their ability to find and recognize value.

Although investing in real estate doesn't require an advanced degree, a basic understanding of business will go a long way to succeeding in such ventures. If one's looking for a "hobby", real estate investing should be at the bottom of the list. However, if you're ready to put a good faith effort into learning and doing investing, it will certainly pay off in the long run.

Who can Invest in Real Estate?

Anyone who has interest in doing so. What kind of properties are there to invest in?

• Single Family Homes
• Condo, Town Homes & Duplexes
• Apartment Buildings
• Industrial Buildings
• Office Buildings
• Vacant Lands
• Joint Ventures
• Foreclosures

How much money do I need to invest in real estate?

The amount of money an investor needs to start can range from 5% to 25 % of the value of the property. Since every property is different the initial investment can vary.

How do I get started with real estate investing?

You need to sit down with a Real Estate Investment Counselor who can help you put a plan together for Real Estate Investing.

Call Pat and Pam Murphy toll free at 800-373-1237 today!