When it comes to real estate investing, the question that most real estate investors ask is how to make quick money with real estate. So, if you are a real estate investor looking for short-term real estate investment strategies, then continue reading this blog to learn about the fastest strategies every real estate investor need to know.
Short-term or long-term real estate investing?
The choice between short-term real estate investment strategies and long-term strategies depends on many factors. What are your real estate investment goals? What is your experience in investing in real estate? How much money do you have to invest in? If you are looking for faster and higher returns on your real estate investment, then you should consider short-term real estate investment strategies.
Related: 3 Short Term Investment Strategies Every Real Estate Investor Should Know
Short-term real estate investment strategies are more favored by real estate investors who want to invest in real estate with little or no money at all. Although your return on investment will tend to be faster and quite a bit higher,short-term real estate investment strategies involve more risk as well.
Short-term real estate investment strategies you should know
Bird Dogging
Bird dogging is a real estate investing term used to describe a real estate scout who looks for discounted or distressed real estate properties with a value below the market price and matches sellers with real estate investors. These real estate investment properties are usually hard to sell, and their owners have difficulty keeping and maintaining them. Therefore, real estate investors buy these real estate properties at a lower price, renovate and repair them, and then make a good profit by selling them again. Real estate investors who look for short-term real estate investment strategies prefer the bird dogging strategy because little or no money is needed at all because, for the matter, you are not buying an investment property, you are just a real estate scout who locates real estate properties and shares their information with other experienced real estate investors. In this way you can make a decent commission without risking your own money.
Bird dogging may sound as an easy job, but it is not. You need to have the basic knowledge on how to locate real estate properties with high investment potential, and to have enough trusted contacts to present them your findings. In addition, like all short-term real estate investment strategies, having a good reputation among real estate investors is the true key to success.
A note to real estate investors who consider the bird dogging strategy: In some states it is required to have a license to operate as a “bird dog”, so before you start, check your state laws or consult an attorney.
Wholesaling
Real estate wholesaling is another common and successful strategy to make money with real estate. A real estate wholesaler is an investor who finds properties that are under the market price or can negotiate a good price with owners and then markets the property to potential real estate investors. In real estate wholesaling, your role is just to get a real estate investment property under contract and then sell the contract to another real estate buyer, without having to pay any money. You can easily make a sizable profit by charging a wholesaling fee to the buyer you assign to the contract.
This is how it works:
X: Property owner
Y: Real estate investor
You: Real estate wholesaler
1- You make an offer to X and get a contract for his/her property without paying for it yet.
2- You present the deal to Y, and charge him/her a wholesaling fee for putting the contract together.
3- Y purchases the real estate property from X.
Real estate wholesaling is more complex than the bird dogging strategy as it requires you to have the experience and education needed to negotiate a deal with property owners and real estate investors. Success in real estate wholesaling guarantees a potential income of thousands of dollars per month and sets the path to grow your connections. Like all short-term real estate investment strategies, real estate wholesaling comes with high risk. A lot of real estate wholesalers fail because they back out of contracts when they don’t find buyers, which seriously harms their local reputation among other real estate investors
Buy, fix and flip
Fix and flip might not be the easiest way to make money with real estate, but if done the right way, serious profits are guaranteed. Fixing and flipping is all about purchasing a discounted or old property, renovating it, and finally selling it for a much higher price than it was originally bought for. As a real estate investor with enough experience and knowledge about the local housing market, fixing and flipping can be turned into a profitable business that will earn you money in a relatively short period.
To succeed in the fixing and flipping business, you should be quite familiar with the real estate market and you should be able to answer the following questions: What is a low rate of a property and what is the current market rate? What areas offer real estate properties that are perfect for flipping?
Related: Top Six Real Estate Investment Strategies
The Bottom Line
Short-term real estate investment strategies can be a great choice for real estate investors who want to make quick money in real estate. But before considering any of the above mentioned strategies, make sure to have enough knowledge about the nature of each strategy and the risks associated with it. After all, making money in real estate is all about being able to learn fast and adapt to new strategies.
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Related: 5 Ways to Make Money Fast in Real Estate Investing
