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Real Estate Investment

Wondering which real estate investment is best for you? If so, you're not alone. Although the market is undergoing massive transition, there are still numerous opportunities to profit in this field.

One of the best places to obtain real estate investment information is through the Internet. However, caution should be used because real estate is a hot topic and many unqualified people are jumping on the bandwagon. If something sounds too good to be true, it probably is

Some of my favorite investment opportunities include purchasing distressed properties such as foreclosure, bank owned and short sale properties. These properties generally require considerable repairs and upgrades.

When homeowners are struggling to make their mortgage payments, home maintenance generally falls to the wayside. If the home falls into foreclosure, property owners have no incentive to invest money into a home they will eventually lose.

Foreclosure homes are a good choice for both buyers and investors. Foreclosed properties are sold through public auction and typically sold for the balance due on the loan. Since foreclosure homes have no equity, the average selling price is around 10- to 20-percent under market value.

If no one bids on foreclosed properties through auction, the property is returned to the bank. At this point it becomes bank owned. The bank then sells the property either through their loss mitigation department or a realtor.

Also known as real estate owned or REO properties, bank owned homes can be purchased as a primary residence, second home, rental property or rehabbed and flipped for profit. REO properties typically sell for 60- to 80-percent of the appraised value.

Wholesaling real estate can be a lucrative investment strategy. Investors purchase homes significantly under market value then resell them to a buyer or investor. Although they might only make a profit of 10- to 20-percent, they do not have to engage in repairs. They simply purchase the property and sell it "as-is" to a buyer.

House flipping is a popular real estate investment strategy. However, this type of investment is not for the faint of heart. Flipping houses can be an expensive and labor-intensive process. In most cases, renovations take longer and cost more money than expected. Depending on the condition of the home, investors may have to invest significant funds in order to return the property to livable condition.

A relatively unknown real estate investment is probate estates. When a person dies all of their assets are held in probate. Probate is used to validate the decedent's Will, assess the estate's value, and distribute assets to named beneficiaries.

When decedents hold real estate with a mortgage note the estate is responsible for maintaining payments, property taxes, insurance, and other expenses related to the property. If the estate does not have sufficient funds, a judge can order the probate executor to sell the property.

In most cases, probate real estate is in good condition and requires little work. Engaging in this type of real estate investment requires some detective work. Wills are public record and can be obtained through local courts that handle probate matters. Learn the procedures for locating real estate held in probate by reading my probate properties article.

These are just a few investment opportunities. While you are here, take time to peruse our real estate investment article library which is packed with up-to-date investment strategies, tips, tricks and resources.

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Published on April 12, 2009 at 03:49 AM

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