Types of Real Estate Investing

There are many ways to make money investing in real estate, and no one technique is the “right” way. Here are some of the most common approaches.

Best low-risk strategies for beginners

Beginning real estate investors should stick with proven low risk strategies, such as quick flipping houses (wholesaling), lease options, and taking title “subject to” the existing mortgage.

Although technically not real estate, investing in mobile homes can be a great way for a beginner to get started and a super way for everyone to generate a very nice monthly cash flow.

Profitable strategies for more experienced investors

Investing in commercial real estate can be the most profitable option for more experienced investors. Just be aware that higher profits may carry a somewhat higher risk. Due diligence is a must, and no one teaches that better than Ray Alcorn, host of our Commercial Real Estate Forum.

Investing in foreclosures and bank foreclosed real estate (REOs), either with or without a short sale, can also produce substantial profits.

Rehabbing is also for more experienced investors. If you know what you’re doing, you can usually make bigger profits than with flipping houses or lease options, but you also have more potential risk. The most important rule here is this: Do not be the repairman! Hire a pro who knows what he's doing.

Many investors enjoy buying and holding single family houses as rental properties. That way you can get cash flow every month, some decent tax deductions every year,  and a large profit when you decide to sell. If you’re interested in rental property, be sure to learn everything you can about landlording.

Experts in discounted mortgages, trust deeds, and other “paper” understand the power of coupling real estate transactions with real estate paper. By combining the two, you have the ability to out-negotiate, out-maneuver, and outsmart your competition.

About the Author:

J. P. Vaughan founded Creative Real Estate Online (www.creonline.com) in 1995 and has been the Publisher since then. She is the author of How to Buy Your Dream House for 1/2 Price (Quantum Publications 1994, out of print). She is also an attorney who practiced law in Michigan until she started investing in real estate full time in 1988.

J.P. is very proud of her daughter, Jeanne, who has been working with CRE Online since 1998 and is the Editor and Director of Operations.