When it comes to making money in real estate the highest profits can be found in the art of flipping. Flipping real estate is the process of buying a fixer home under value, doing the necessary work, and reselling it for substantial profit. But while there are great profits to be earned in flipping real estate, there is also a great potential for loss.
The key to making money in real estate is to maximize profits and minimize loss; both of which can be done by avoiding these mistakes most commonly made by real estate investors:
* Buying over-priced properties – Making money in real estate requires buying a home substantially under value so that you can resell it for a much higher price. If you buy a home that is only marginally under market value, you will have a hard time selling it for profit. Remember; you must also budget repairs, legal fees, broker commissions, taxes, operating costs, and leave room for unforeseen expenses. As you can imagine, all of these can dramatically affect your bottom line.
* Buying properties that need too much work (for your individual experience) – While making money in real estate through property flips always involves some amount of remodel or repair work, you can purchase properties that are too far gone to make a profitable flip feasible. Always have a good idea of how much the needed work is going to cost before you purchase a home.
* Not performing a title search – If you purchase property by traditional means, a title search will be performed for you. But if you buy foreclosed homes, it might be up to you to perform a title search on your own. Never underestimate the need for a title search. Keep in mind that you will inherit all legal issues and liens associated with a property when you buy it.
* Sticking to schedule – Making money in real estate only happens when you buy and sell a property quickly. If you hold onto a property for too long, you will have to pay bank loans and interest charges. Make sure that all of your construction stays on schedule to avoid these costly charges.
Sometimes making money in real estate has less to do with the smart choices you make and more to do with avoiding the costly mistakes that can cut into your profits. Keeping your eyes open for potential losses will ensure that you keep your hard-earned profit where it belongs.
About the Author: Chris Thomas is a real estate investor and author of the best selling ebook "Dominate Preforeclosures," which teaches you how to acquire property in pre-foreclosure with a successful, proven way to approach homeowners and get the deal. Learn the strategies that the top investors use daily, but refuse to share by visiting http://www.dominatepreforeclosures.com
Article Source: http://EzineArticles.com/?expert=Christopher_P_Thomas
Wednesday, January 31, 2007
Making Money In Real Estate: Mistakes To Avoid
When it comes to making money in real estate the highest profits can be found in the art of flipping. Flipping real estate is the process of buying a fixer home under value, doing the necessary work, and reselling it for substantial profit. But while there are great profits to be earned in flipping real estate, there is also a great potential for loss.
The key to making money in real estate is to maximize profits and minimize loss; both of which can be done by avoiding these mistakes most commonly made by real estate investors:
* Buying over-priced properties – Making money in real estate requires buying a home substantially under value so that you can resell it for a much higher price. If you buy a home that is only marginally under market value, you will have a hard time selling it for profit. Remember; you must also budget repairs, legal fees, broker commissions, taxes, operating costs, and leave room for unforeseen expenses. As you can imagine, all of these can dramatically affect your bottom line.
* Buying properties that need too much work (for your individual experience) – While making money in real estate through property flips always involves some amount of remodel or repair work, you can purchase properties that are too far gone to make a profitable flip feasible. Always have a good idea of how much the needed work is going to cost before you purchase a home.
* Not performing a title search – If you purchase property by traditional means, a title search will be performed for you. But if you buy foreclosed homes, it might be up to you to perform a title search on your own. Never underestimate the need for a title search. Keep in mind that you will inherit all legal issues and liens associated with a property when you buy it.
* Sticking to schedule – Making money in real estate only happens when you buy and sell a property quickly. If you hold onto a property for too long, you will have to pay bank loans and interest charges. Make sure that all of your construction stays on schedule to avoid these costly charges.
Sometimes making money in real estate has less to do with the smart choices you make and more to do with avoiding the costly mistakes that can cut into your profits. Keeping your eyes open for potential losses will ensure that you keep your hard-earned profit where it belongs.
About the Author: Chris Thomas is a real estate investor and author of the best selling ebook "Dominate Preforeclosures," which teaches you how to acquire property in pre-foreclosure with a successful, proven way to approach homeowners and get the deal. Learn the strategies that the top investors use daily, but refuse to share by visiting http://www.dominatepreforeclosures.com
Article Source: http://EzineArticles.com/?expert=Christopher_P_Thomas
The key to making money in real estate is to maximize profits and minimize loss; both of which can be done by avoiding these mistakes most commonly made by real estate investors:
* Buying over-priced properties – Making money in real estate requires buying a home substantially under value so that you can resell it for a much higher price. If you buy a home that is only marginally under market value, you will have a hard time selling it for profit. Remember; you must also budget repairs, legal fees, broker commissions, taxes, operating costs, and leave room for unforeseen expenses. As you can imagine, all of these can dramatically affect your bottom line.
* Buying properties that need too much work (for your individual experience) – While making money in real estate through property flips always involves some amount of remodel or repair work, you can purchase properties that are too far gone to make a profitable flip feasible. Always have a good idea of how much the needed work is going to cost before you purchase a home.
* Not performing a title search – If you purchase property by traditional means, a title search will be performed for you. But if you buy foreclosed homes, it might be up to you to perform a title search on your own. Never underestimate the need for a title search. Keep in mind that you will inherit all legal issues and liens associated with a property when you buy it.
* Sticking to schedule – Making money in real estate only happens when you buy and sell a property quickly. If you hold onto a property for too long, you will have to pay bank loans and interest charges. Make sure that all of your construction stays on schedule to avoid these costly charges.
Sometimes making money in real estate has less to do with the smart choices you make and more to do with avoiding the costly mistakes that can cut into your profits. Keeping your eyes open for potential losses will ensure that you keep your hard-earned profit where it belongs.
About the Author: Chris Thomas is a real estate investor and author of the best selling ebook "Dominate Preforeclosures," which teaches you how to acquire property in pre-foreclosure with a successful, proven way to approach homeowners and get the deal. Learn the strategies that the top investors use daily, but refuse to share by visiting http://www.dominatepreforeclosures.com
Article Source: http://EzineArticles.com/?expert=Christopher_P_Thomas
Investment Opportunities To Be Gained From A Foreclosure Home
There are many investors today who covet bank foreclosure homes as they see the potential profit that they can make from one. It is not uncommon to find a foreclosure home being sold at a price which is much lower than the actual market value. If you follow the old saying "buy low sell high" you stand to earn a nice little return on your investment.
So what is a Bank Foreclosed Home?
These are homes that are owned by a bank or other lending institution because the lender has had to foreclose on the property. Often foreclosure proceedings will be initiated by a bank when the owner can not pay the mortgage over a period of time. But before the foreclosure is finalised an investor, if they so wish, has the opportunity to purchase the property directly from the owner. Many owners are anxious to sell by this method so that they do not have a foreclosure black mark on their credit report. Should the property have accumulated enough equity then the investor is likely to make a very nice profit from it if and when they sell it on.
However if the foreclosure becomes final then the property will be offered for sale either directly by the bank or the lending institution through a real estate auction. When it reaches this point you will find that the lender is very eager to sell the property as well for several very important reasons.
1. It is not cost efficient for any bank or lending institution to own a foreclosed property as they are expensive to maintain. They will need to cover the insurance on the property, pay any taxes that the property is liable for, as well as maintain and keep the property secure whilst it is vacant.
2. It does not look good for any bank or lending institution to have a large portfolio of foreclosed homes as this will just magnify what bad lending decisions they have made.
3. Many banks and lending institutions when selling a foreclosed property will recover any losses that they have incurred upon its sale. They don't care if they make a profit as well.
What is a Bank Foreclosure Home Auction?
This is where banks will sometimes sell foreclosed homes through a real estate auction. If you do your homework right then buying a foreclosure home at auction can be a sound investment. But if you do it carelessly then you could end up paying a lot more for a foreclosure home than it is actually worth.
What you need to do is inspect any foreclosure home thoroughly before you put a bid on it. You will need to calculate the cost of repairing the property as well as what it is actually going to cost you to purchase. Unfortunately there are times when an inspection of the property cannot take place so only bid on these kinds of property if you have a nice margin for any unknown repairs that may occur.
Unfortunately, as with anything that is going cheap, foreclosure homes do not stay on the market for long, so an important aspect of investing in such properties is to have good listings so that you can get to these properties before they are sold. You can obtain foreclosure home listings from Courthouses, Lending Institutions or Government Agencies (but only use these methods if you have time to spare). Otherwise the best way of finding good foreclosure home listings is to sign up with one of the online bank foreclosed homes listing services that are now available. These will provide you with accurate and timely listings of foreclosed homes so that you can be one of the first investors on the scene when a foreclosure home becomes available.
Want to discover more about buying a foreclosure home? Then check out David's site at http://www.foreclosuresonlinecentral.com You can also find lists of seized real estate at http://www.buyingcheaphouses.info
Article Source: http://EzineArticles.com/?expert=David_Jacobsen
So what is a Bank Foreclosed Home?
These are homes that are owned by a bank or other lending institution because the lender has had to foreclose on the property. Often foreclosure proceedings will be initiated by a bank when the owner can not pay the mortgage over a period of time. But before the foreclosure is finalised an investor, if they so wish, has the opportunity to purchase the property directly from the owner. Many owners are anxious to sell by this method so that they do not have a foreclosure black mark on their credit report. Should the property have accumulated enough equity then the investor is likely to make a very nice profit from it if and when they sell it on.
However if the foreclosure becomes final then the property will be offered for sale either directly by the bank or the lending institution through a real estate auction. When it reaches this point you will find that the lender is very eager to sell the property as well for several very important reasons.
1. It is not cost efficient for any bank or lending institution to own a foreclosed property as they are expensive to maintain. They will need to cover the insurance on the property, pay any taxes that the property is liable for, as well as maintain and keep the property secure whilst it is vacant.
2. It does not look good for any bank or lending institution to have a large portfolio of foreclosed homes as this will just magnify what bad lending decisions they have made.
3. Many banks and lending institutions when selling a foreclosed property will recover any losses that they have incurred upon its sale. They don't care if they make a profit as well.
What is a Bank Foreclosure Home Auction?
This is where banks will sometimes sell foreclosed homes through a real estate auction. If you do your homework right then buying a foreclosure home at auction can be a sound investment. But if you do it carelessly then you could end up paying a lot more for a foreclosure home than it is actually worth.
What you need to do is inspect any foreclosure home thoroughly before you put a bid on it. You will need to calculate the cost of repairing the property as well as what it is actually going to cost you to purchase. Unfortunately there are times when an inspection of the property cannot take place so only bid on these kinds of property if you have a nice margin for any unknown repairs that may occur.
Unfortunately, as with anything that is going cheap, foreclosure homes do not stay on the market for long, so an important aspect of investing in such properties is to have good listings so that you can get to these properties before they are sold. You can obtain foreclosure home listings from Courthouses, Lending Institutions or Government Agencies (but only use these methods if you have time to spare). Otherwise the best way of finding good foreclosure home listings is to sign up with one of the online bank foreclosed homes listing services that are now available. These will provide you with accurate and timely listings of foreclosed homes so that you can be one of the first investors on the scene when a foreclosure home becomes available.
Want to discover more about buying a foreclosure home? Then check out David's site at http://www.foreclosuresonlinecentral.com You can also find lists of seized real estate at http://www.buyingcheaphouses.info
Article Source: http://EzineArticles.com/?expert=David_Jacobsen
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