TIP #1 – Decide What You Want
Like anything else you need to see the goal before you can reach it.
First you need to decide on your goals, or what you want to achieve through your real estate investments. Then you can choose the strategy or approach that will best allow you to achieve those goals.
For example, do you want to achieve passive income that will be a greater return on your money than the stock market, or do you want to be financially independent through your passive income on rental property. Or do you want to be an active investor and create a business of rehabbing and flipping properties?
If you want passive income determine how much you need to make a better return on your money or how much you need to be financially independent.
TIP #2 – Determine How Much Investment Capital You Have to Work With
If you have little money the best way to start making money is to invest in rent-ready, or currently rented, properties with a nice positive cash flow. Even if you have cash you may still elect to go this route, or you may choose for a bigger payday upfront.
In the case that you are just starting out, it is best to find low cost houses. The investment for the initial purchase is much lower and the rehab can be done for less. The rule of thumb is not to put more money into the rehab (not including the purchase price) than you will make on the deal. ($20,000 rehab gets you a $20,000 profit.)
You can make money in real estate without money, but that takes a large time commitment and a bit of luck. Otherwise you need some type of funding, whether you purchase with cash or hard money, buy and hold for rental income or rehab and flip, you will always need some ‘just in case’, reserve money when purchasing real estate.
TIP #3 – Choose a Real Estate Market that is Good for You
Not all real estate markets are conducive to purchasing property for cash flow; most of the state of California for example; and of course some areas are better than others. And the best real estate markets for investing in properties for rehabbing and flipping are ones that people are buying homes in, obviously.
Before investing in a market outside your own do some research using sites like http://www.census.gov/. Prosperous investors know they’re in a good real estate market for their investing goals before they start.
Upcoming Article:
Overcoming the Fear of Investing in Real Estate outside of Your Backyard
For market selection tips and market research information please contact me: hutch@montgomerywholesaleproperty.com. And for great rental investment property, visit: www.MontgomeryWholesaleProperty.com and for great wholesale properties for rehab and resale, go to: www.AcmeInvestmentProperty.com.
Posted by Shawn Hutchison 
