How to Build Wealth through Real Estate
Wednesday, October 15, 2008 7:20Real estate is a great business to earn wealth. It has provided many investors with positive cash flow, tax benefits and satisfaction of revolutionizing ones life. It’s really a great field to invest.
As far as stocks are concerned, suppose you invest $200000 in the stock. You can only buy stocks worth $200000. You cannot buy any extra stock. However as far as real estate are concerned a real estate worth $200000 can earn you a profit of $100000. Hence real estate is far better than stocks. It is less risky too.
Suppose you find a real estate in some area whose value should be around $400000. You can easily buy it for around $275000. There is lot more scope for bargaining as far as real estate is concerned. The price of real estate can even be bargained for less if you can find any disputes related to the property. Real estate when given as rent is also tax saving.
There are many terminologies in real estate which are advantageous and great to invest. You can look for foreclosure properties or be indulged in wholesaling. We will discus each of them one by one:
- Wholesaling: wholesaling means flipping of real estate properties in order to earn profit. You can become a wholesaler. The only thing you have to do is to pass some exams and then invest. You need not have money for wholesaling. However, you should have some for down payment. You can take loans both long term loans and bridge loans. Once you flip the house you can pay back the loans and you will still be left with a good amount of money. Suppose you buy a house for $275000 whereas the actual price was $400000. Hence you even sell it within four to five days at real price, and then also you will be able to earn a lot of money. However you will be a fool if you do so. You can easily do some repairing and make the property look great. You can then sell for even higher price. This is wholesaling.
- Foreclosing: sometimes some properties are asked to be sold out by the court. Then the property is said to be foreclosed. You can buy a foreclosed property for very les as compared to original price. In this way by selling it at higher price you can earn a large amount of profit.
You can go for long term investment or short term investment. You can also invest in rental properties. You can earn profit as rent and then after some years sell it for higher prices. Any what ever you read about real estate, you will come to only one conclusion that real estate investment is risk free and profitable.