There are many methods of real estate investing, but each one is carried out very differently. Find out how in today’s message.
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Today I’ll give you a quick lesson on real estate investing, and I’ll cover three categories it can be particularized into.
Rehabbing, or what’s better known as “house flipping,” is a popular form of investing. One way to approach this type of investing is to take the home down to its studs in order to make some larger renovations, like moving rooms around or replacing major systems or functions.
Of course, this isn’t always necessary. A rehab that’s smaller in scope might just mean replacing or upgrading the cosmetics of the home—upgrading a single room, putting some paint on the walls, or replacing flooring are all examples of a lighter rehab.
In both cases, you’d then sell the property and profit from the sale.
Wholesaling is usually carried out by a licensed real estate professional who finds a discounted property and gets it under contract. Before closing, they’ll try to sell it to another buyer, and the margin they make comes from the difference between their purchase price and the sale price they set.
Holding is when you purchase a property and rent it out to tenants to generate a monthly cash flow that will do two things: cover the costs associated with the home and, hopefully, turn a profit as well.
Investors who go this route might choose to buy a lower-valued home and, in turn, enjoy a higher cash flow month-to-month. Conversely, if you were to buy a higher-valued property with less cash flow, its conditions along with the neighborhood it’s in make it more apt to appreciate in the long-term.
If you’re interested in any of these investing strategies, we have resources we’d love to make available to you. As always, if you have any other questions or comments, or there’s a topic you’d like to see us cover, please reach out to us. We’d love to hear from you!