5 Tips on How To Get Started in Real Estate Ivesting

“Cash buyers are kings in weak home-sales market”

 


This head line was pulled from an article I found on USAToday.com’s website regarding the current housing market.

The article states, “Last month, all-cash buyers accounted for 30% of existing home sales, up from 25% in May 2010, and 12% two years ago, says the National Association of Realtors…Cash buyers, who are mostly investors, accounted for at least 30% of existing-home sales for the fifth-straight month, the association says. They hit 35% of buyers in March.” Click here for full article

Over the last 2 months, the percentage of cash buyers has gone up almost 10% nationwide. Cities such as Ft. Lauderdale, Phoenix, and Lax Vegas (which were hardest hit by the bubble burst) have seen cash purchases make up 50% and higher for sales last month. This activity by investors is what is helping keep the market alive and moving. This means that whoever has cash, or the SMARTS to be involved with real estate today, will be crowned kings in a few years.

Chicagoland is no different ant there is no better time to help these cash buyers find deals and get involved. While the news likes to focus on the negatives, we see the opportunity. There is so much opportunity that USA Today had to write a report on it. Its no surprise though, if you were going to seminars and events back in 2008, 2009, you heard everyone saying this would happen, and guess what, IT IS!

Don’t get discouraged if you have not done a deal, there is still time and many ways to get involved.

Here are the ways to get involved in today’s market:

1. Become agent – This is what most people think they have to do when they think of getting into real estate. This however, does not automatically get you involved. If you do not know the areas or how to estimate repairs, or know what is a good offer, it wont be easy getting cash investors to want to work with you right away. On the bright side, having a license can open up many doors and if you can list bank REO’s, then you will get buyers indirectly because of it. Right now there are classes to get licensed for about $600. Reason the class is priced higher is because the state changed the licensing laws and made things a bit more tedious and difficult. I think if you have the time to study and the cash to take the class/exam, having a license would be a huge plus in your investing career.

2. Bird Dog – This is a term for those who find investors property. The bird dog has little to no costs up front and anyone can get started tomorrow being a bird dog. If you bird dog, you are basically looking for people who want to sell their houses and connecting them to the investors. While this is a cheap and quick way to get into the real estate world, you will need to build a large pipeline of potential deals to get significant money from it.

3. Wholesaling – Wholesaling real estate is a step above a bird dog. As a wholesaler, you would be in charge of finding a property, negotiating a price, putting that property under contract, and selling that paper to an investor who will purchase the property and pay you a much larger finders fee. The best wholesalers have put in time and effort to learn; rehab estimates, property values, how to get title information, know taxes, city pockets and zones, and much more. Wholesaling can be lucrative, yet it requires patience and a large desire to learn. Many don’t make it past bird dogging into wholesaling, but many who successfully wholesale, open doors to being full blown real estate investors.

4. Rehabber – Being a flipper is where many want to end up. This is where you make the biggest bang for your buck, or just go broke trying. Unfortunately, if you are like me, you hear horror stories from random people who thought this was easy and ended up getting burnt. The truth is, flipping properties takes a lot of prepping, coordinating, and management skills. A good flipper knows an area, can work with others, has done homework on contractors, and oh yeah… has CASH! If you do not raise cash, or have cash readily available, being a flipper will basically not happen. Either way, flipping real estate is where you can make the money that will change your life.

5. Partnering – There are some who would rather put something up in exchange for knowledge and experience. For example, maybe someone wants to wholesale but they rather have someone teach them the ropes. They either pay a coaching fee, or a pay for a marketing campaign, and they get to help the wholesaler right away and learn in the process. Same goes for rehabbing. People with cash would also be encouraged to put up a large percentage, if not all, of the purchase money for a house, in order to gain experience while working with seasoned pro’s. Partnering takes a bit more guts, cash, but ultimately cuts your learning curve and expedites your ability to take action for yourself.

Hope that helped! Get ALL Exclusive information here on how to wholesale real estate.

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