If you wish to enter into the real estate field to buy property as your investment or as a developer, this article outlines many ways that you can do it.
While investing in real estate, make sure you use “buy them and fix them” method. It’s basically a strategy of buying properties that require work and fixing them up in order to increase their value.
Here are some steps to follow:
Carry out adequate research
Before investing in any property as a real estate developer, do research on it. Choose a region where you want to buy a property and view the houses in that region until you find the one that has least value and has the potential to fix up.
Pick the property with lowest cash down payment
Buy a property that requires lowest cash down payment. Also, you can find many sellers who don’t require any down payment because they are actually keen to shift to somewhere else and want relief from the mortgage payments.
Renovate & Refurbish
After taking the possession of the property, start its renovation and refurbish as soon as possible in order to increase its value. You can do this work yourself. If required, you can take courses in home construction or interior designing, buy your own equipments and start working according to professional advice from home renovation experts and interior designers.
Maximize Investment Value
After renovating and refurbishing your property you can sell it for more than you paid and use the profit to buy another property to refurbish and renovate which is what a real estate developer does.
Also, you can rent the property for a monthly payment more than the amount that covers your mortgage payments and gives you an extra income. Moreover, you can rent out the renovated property and refinance it at your buying price, depending on its new value at the time you rented it to a tenant.
Along with the monthly rent, you can get a higher appraisal of the value of your property. With the bank loan, you can take out a new mortgage on your investment, depending on the appraisal of your property.
Switch to a Larger Property
You can use the mortgage loan to buy a larger house, renovate and refurbish it in order to sell, rent or refinance it once again. Along with the increase in your investment, assets, cash flow and experience, you can decide to repeat this process as you switch to duplexes, triplexes, fourplexes and ultimately large residential apartments and commercial malls.
Many real estate players started off with individual purchase of a single property and increased their investment slowly and steadily. They constructed or bought one property, sold it after renovation or a few years later, bought another property, invested their time, money and efforts to renovate and refurbish that property and so on.
At the end of the day, such real estate developers or investors create a huge real estate empire that includes dozens of hundreds of residential apartments and commercial malls.