INSTITUTE OF REAL ESTATE MANAGEMENT
President • Debra McCracken, CPM President Elect • Kathi Pearce, CPMC Vice President-Member Services • Kimberly Fuhrer, CPM Kelley Brewster, CPM, CCIM Vice President Education • Traci McCauley, CPM Vice President-Finance • Kim Gach, CPM IREM Chapter #29 11575 SW Pacific Hwy Suite 210 Tigard, OR 97223 (503) 228-0002 (503) 406-2003 fax
There are many methods for acquiring wealth available across the globe today. One of the most easily accessible ways even for the new investor is real estate investing. Many people have made millions of dollars by investing in the real estate market in one form or another. Real estate is a profitable vehicle for the investor who is dedicated to
How To Get Started In Real Estate Investing
learning about all of the different types of investments, option, risks and potential rewards that come with real estate investing. There are many different ways to invest in real estate. Here are some of the more common ones people use to get started. Find investment deals in real estate in: New York City Los Angeles Chicago Houston Boston Seattle
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1) Rental property. This is one of those rare real estate investments where you can make money even if you pay top dollar for the property. The reason is you are going to hold onto this property for the long term. You're only requirement is the property generate a positive cash flow. This means after you sum up all of your expenses on the property like financing cost, taxes, insurance and a vacancy rate, the amount you are collecting in rent surpasses this figure. This is one of the classic "get rich slow" methods of real estate investing. You are making a small amount of money each month from the property in rental income, and you are also slowly building up equity in the property over time as you pay down the mortgage.
the price will come up once construction is complete. I have known investors who have purchased several condo units in a facility being built and put $5,000 down on each unit as a down payment. Then before the property was even constructed "flipped" their contract to an end buyer who was willing to pay them 4 to 5 times their down payment just to get in on the deal. The problem with this type of investing is it normally only works when a market is going up regularly. In a down market like we are experiencing these types of deals are much harder to find but they are still out there. There are still part of the country that are very desirable to live in and are experiencing market growth.
2) Pre-construction investment. This is also known as buying property on "spec" or on the speculation that when the property is finished it will sell for a much higher price than you have invested in it. This is seen mostly in new condominium projects where investors fight to buy the units before they are built assuming
3) Flipping houses. This is a type of property investment that has made leaps and bounds in the last few years thanks to the popularity of many popular home improvement and house flipping shows on cable networks in the last few years. This has become a very dangerous thing as people who have Continued on page 11
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The Landlord Times - Metro • January 2013