1. Buy a Fixer-Upper
There are several inexpensive ways to earn a buck with real estate. Flipping is one of the quickest real estate maneuvers if you want immediate cash. Buy an abandon or rundown property and make necessary improvements. Before making the purchase, consult a real estate agent and appraiser. Assess the property’s current value and the estimated value once improvements are complete. Within six to eight weeks, you can remodel the property and sell it for a profit. This method also works with foreclosures. For example, purchase a home in “as-is” condition for $60,000. Make minor improvements such as a new coat of paint, carpet, and appliances. Next, sell the property 25% above the original purchase price.
2. Buy and Hold
When buying a home in “move-in” condition, improvements may not immediately boost the appraised value. In this case, hold onto the property for at least one year. If you keep the property for at least two years, you’ll receive certain tax benefits. During this “buy and hold” period, you can choose to live in the property, or occupy the property with renters. Once the property value increases, sell the home for a nice profit.
3. Tax Lien Properties
Tax lien properties are perfect for new investors with little start-up capital. You can purchase a property free and clear for a few thousand dollars. Typically, tax lien properties are older home without mortgage payments. If a homeowner dies or can no longer afford the property taxes, the city takes possession of the home. Investors can acquire a property by paying the past due taxes and other liens. Next, the new homeowner can sell the property to other investors in “as-is” condition. Even if the property is sold to another investor at wholesale, the new homeowners can make a sizeable profit.
4. Pre-Construction Homes
Purchase a home in a master planned community or subdivision in Phase I of construction. Since new construction properties appreciate approximately 2% each month, you’ll acquire instant equity once the community is complete. In as little as 6 – 12 months, you can sell the home and profit $50,000 to $100,000.
5. Find Deals for other Investors
Find real estate deals for other investors and earn a hefty commission fee. Several seasoned real estate investors choose to partner with rookies and share their commission. The scout, or finder, searches for the good real estate deals, and provides the investor with quality leads. If the investor is able to secure the deal, the scout receives a finder’s fee.