Real estate. Such a simple term. But, what is it really? It is very easily defined as “Property in buildings and land.” Many people make the statement, “more millionaires were created through real estate than anything else.” Well, a quick Google search would prove that statement wrong. Although incorrect, real estate does rank in the top five industries most likely to create millionaires. Investment Real Estate! What Is It and How Do You "Do" It?
So, how do you “DO” real estate? How and where do you start? There are so many different ways real estate can be done. It's almost totally up to the imagination how you do it and where you start. The purpose here is to share several of the many various methods of “Doing” real estate. Through this series of articles we will explore in depth many ways to participate in the real estate industry. Although there are many ways to participate in real estate, the two most common would be “consumer” and “investment.” So, let's very briefly address consumer real estate. This would be purchasing a home to live in personally. Although I would never recommend doing so, many people do. The most obvious is the traditional method. We locate a Realtor® or real estate agent, share with them the criteria for the piece of real estate we are interested in. Once the property has been located we secure our financing through a bank or mortgage company. Then
“Investment” real estate, what is it? Well, I guess that all depends on how creative you are, both in use of the properties and the funding for and profit from them. Firstly, the term “Investment” in this instance can be defined as “the action or process of investing money for profit or material result.” That said, let's briefly touch on several forms of investment real estate. The most well-recognized form of investment real estate would be “traditional rental properties.” I believe everyone gets the idea but there can be many such forms of this type of investment, both residential and commercial. These properties could be single family, multi-families, commercial multi- family, retail, office, industrial, agricultural, etc. The basic idea is to own or control the interest in a
property and rent or lease it to others for profit or material result.
Another well-known type of real estate investment is “short term rental properties.” Most everyone knows of AirBnB, VRBO, etc. Generally a short-term rental could be defined as “a furnished living space available for short periods of time, from a few days to weeks on end.” However, the term is not limited to such a definition. RV, motorhome and travel trailer lots fall under this designation as well. Camping spaces may fall into this category too. Oftentimes this category of investment property has strict laws and restrictions attached to them that may make it undesirable for certain investors in certain locations. One popular way to invest in real estate is “flipping.” Flipping is taking a distressed or outdated property, making it new and desirable again and selling it for a profit. Much research must go into this type of investing. Material cost, labor cost, codes, market and market values, trends, etc. The ROI can be very
we proceed to the closing process. Pretty straight forward. However, this is not what this article is about. So let's get on with it.
handsome but the risk is high as well.
One of the lesser known types of real estate investment is “land leases.” This can come in many different forms. Large
Now to the meat of this story.
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