If you've got an entrepreneurial spirit, have some time and
extra cash, why not think about investing in real estate as
you've got the potential to earn hundreds of thousands, if not
millions of dollars a year simply by turning "flipping"
homes over.
This is particularly true these days, which is still very much
a reality in this country even amidst all the talk about the
real estate bubble.
Investing in real estate has become a booming business for
people of all backgrounds and start-up capital. Why? Because
being a real estate investor is not only easy, but it's
rewarding to see your hard work pay off so quickly when you make
a sale with little or no money down.
Just on September 30th, there was a special segment on ABC
News, 20/20 about the latest real estate boom in America.
Real estate boom really has people flipping
for Miami and all around the country, particularly in cities
like Chicago, Boston, New York and LA. Click here to
read more on ABCNews.com
Some Important Tips In Getting The Most Out Of Your Real
Estate Investment Opportunity
- If you're low on capital money to invest in
real estate, form a partnership with friends, family or
colleagues. File a business name with the State Corporation
Commission and register with your local city to become a
legitimate tax-paying entity. Once the group of you is able to
pull funds together, put them into a bank account under your
business name. You can then approach the bank for a bank loan
for your business, increasing your chances of getting funding.
Creating a legitimate business not only can act as a liability
shelter for you, should your venture prove to be non-profitable,
but it helps to create a friendly working relationship with your
new colleagues into which everyone gets equal return on their
own financial contributions.
- If you have capital to spend, invest in a tax lien. A
tax lien is, essentially, purchasing someone's foreclosed
home, which the government retains control over until taxes are
paid. As a real estate investor, you will most likely receive a
substantial return on your money invested in a tax lien
because most homes that have been seized by delinquent tax
payers are eventually turned over to the individual or entity
that has purchased the tax lien.
To find out about tax liens in your area, contact your local
government for a list of tax lien sales and foreclosed homes.
Many states also have tax lien sale information available online
through subscription-based companies or through government
auction houses.
- You don't have to go for a killing your first year of being
a real estate investor. In fact, most people start small. Begin
by using the available money that you have to make a down
payment on a modest home in an up-and-coming area. Many people
purchase homes that are "fixer-uppers" and they get
started by doing all of the work on their own.
When the economy is booming, as it has been for the past decade,
then you can fix your home up and turn it around in a relatively
short amount of time for a moderate profit. You can avoid
paying capitol gains taxes on the cost of renovations and
improvement, so keep all receipts for work done.
If after your first purchase, you find that you are indeed
serious about investing the time and money into becoming a real
estate investor, then use the money from the sale of that first
house into purchasing another home. From the time of the sale,
you have 180 days to invest the money into a new home
before you will have to pay capitol gains taxes in what's known
as Exchange 1031 Tax Deferred Benefits on the
money you gained from the sale.
There are many resources and lending agencies prepared to help
individuals interested in establishing a career as a real estate
investor, Furthermore, many cities incentive the revitalization
of older neighborhoods by catering to the convenience of real
estate investors. After all, everyone enjoys seeing property
bought and sold quickly within a community, for it signifies the
health of the area. Call your local government to find out if
there are specific tax advantages in place to help real estate
investors and home-based businesses alike to maximize the return
on their money.
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