Making money in real estate investment is like what we call in the stock market investment circles made in the buying and this is also known as value investing. The difference between the stocks and real estate is that we can actually buy the property and make changes to it unlike in industries unless you purchase a great share in the company.
Here are the three different ways to invest in real estate at a bargain from the market price:
1. Private Sales
Buying a property from private owners is good because you avoid the competition from other buyers at auctions. The edge of this technique is that sellers are facing foreclosure or other cash flow problems and might sell you the real estate at an affordable price in exchange for quick cash.
Real estate investment type property usually associates god rental property, so a good start would be to look for a real estate in an area that has high rental proceeds. You have to spend more time understanding the needs of the private owner and you may be able to deal a cheap price for your real estate investment than the market. There are things that may indicate that you can arrange for a lower price like when the owner migrates out of the state, the owner is in debt and needs the more money or when the property is looking old and not maintained. You need to remember these things and get a better price for your real estate investment.
2. Sell and lease back
There are many businesses that purchased their property during the property boom and face a liquidity crunch. These businesses then sell a property to an investor for money, then lease it back for a long period of time at a rent which give the capitalist a 9 to10% return to the buyer. Your goal in this deal is to set a monthly cash flow when you do your real estate investment in this estate.
Buying a foreclosure property can be a good real estate investment because sometime depending on how long they loan is dominant, the bank might want to release the property at a cost that’s under the market valuation so as to sell it off.
You would want to spend some time and effort searching at the foreclosure property before you bid for it at the auction. You must call a representative from the auction house and see for yourself the investment property. If you are a top bidder, always be ready and prepared to give a check of 10 percent of the closing price or else your bid will not be backed.
Therefore, the above-mentioned 3 ways are what you need to learn and know to buy an investment property at a discount to the market value. Keep in mind, the money is made in the buying and you would want to try buying the property at an affordable rate to the normal market like bend real estate so as to be able to resell it later for a bigger profit.