How to Profit from Real Estate Investing

Buying a revenue property.

You need to be able to get a conventional mortgage, or find a partner that can.

Put up a down payment or again find a partner that can do this.

This partner is called a Joint Venture partner, or JV for short.

Before looking for property you need to have some sort of buying criteria. As you get better at this you can change it from a buying criteria to an exit strategy. The difference between the two is with an exit strategy once you know all the options of buying and selling you will be able to buy any house on the market and with the proper exit strategy you will make money. Where is a buying criteria will help you filter through the good and not so good deals.

The buying criteria.

When looking at a property for rental income you need to know all that will be required to buy the property and to hold onto it afterwards. You need to have a mortgage company, real estate agent (me), lawyer, accountant, banker, plumber, electrician, and property manager. These people will become your team. Now you need to know how much can you buy? Do you have a down payment? Can you get approved for a mortgage? Most people can get approved for a mortgage on 1-3 rental houses. After that you will need to find joint venture partners to help you build your real estate empire.

So you have found a property. Is it selling for the right price? I can help wit that with powerful CCIM software. Can you find renters for this kind of property? And then rent it out for the price you need to at least break even. I can help with all too !

If you find a property that is selling for $100,000 and you put down $20,000 the mortgage would be about $521 per month. So don't think that if a renter pays you $550 per month you are making any money. You need to calculate in taxes, general maintenance, and vacancy. Check in your area for these rates. But lets use 5% vacancy and 5% maintenance, and $75 per month for taxes. Now you are at $648 per month just to break even! What about condo fees? Is there any? If so you better fit those in. Now with the above example can you find a renter at this price? How about higher, and where is the market for this area going? Check into development of the area. I always feel that once you have about 10% of the houses in the neighborhood being torn down and new houses going in you are pretty safe.

Once you have your buying criteria then you can do this multiply times. As you can no longer buy for yourself you will need JV partners. Each partner will want about 50% of the profits. Unless you are really good at what you do, then you can get JV's for closer to 35% of the profits. This is because their risk is going way down.

In future articles I will explain other ways of buying real estate.