They say that survivors are those who know how to adapt to any type of environment. When it comes to investing in real estate, only those who know how to change their strategies will survive tests as harsh as a recession. That is why real estate investors are changing their position and redirecting their capital. The way forward today, at a time when the economy has yet to fully recover from a depression, is short-term real estate investing.
These are investment methods that give much quicker returns than the usual “buy and hold” method where investors buy properties and age them before selling them for a much higher price. Real estate appreciates over years, so you’re bound to make big profits over time. But if you’re short on time, there are “quick cash” investment strategies that are effective in current market conditions.
The most common short-term methods of investing in real estate today are rehabs and wholesale homes. Rehabbing houses, also known as fix and flip, is buying cheap properties, repairing them, and selling them for a profit. This business is boosting today due to the relatively low prices of real estate properties.
Rehabbers can fix and flip more properties because they can buy homes today at bargain prices. Their favorite projects are known as fixer-upper houses or handyman specials. These are cheap properties in need of repair. Some of them were abandoned by their owners for years, while others were sold because the owners were having financial difficulties.
In addition to superior homes to fix up, rehabbers are also buying REO homes. These are properties that were repossessed by lenders from homeowners who owed them mortgages and other financial obligations. REO homes have already been foreclosed on, so all liens and claims against them are removed. This further reduces their prices. Those who invest in real estate can buy properties for pennies on the dollar today.
A rehabilitation project usually takes from a few weeks to a few months. The schedule depends on the repairs required and how long it takes to sell the property. When it comes to profit, a $30,000 paycheck at the end of each project is very common.
Meanwhile, the wholesale of houses lasts only a few days. This is placing a property under contract to purchase it. Next, you’ll find a buyer and assign them the contract. At wholesale houses, paychecks of at least $5,000 are basic. Since you do not need to buy a property, you will not need a large capital in this business.