Investment Strategies to Increase Your Real Estate Profits

Investment Strategies to Increase Your Real Estate Profits

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Investment Strategies to Increase Your Real Estate Profits

By using the right investment strategies you can massively increase your real estate profits.

There are many strategies by which you can use to create wealth through real estate. You do not have to use all the strategies that are discussed.The strategy that is most suited to you will depend upon your investment plan.

A person who is starting out in real estate will have a totally different strategy as apposed those who have experience and substantial funds to invest. For instance if you are with no money and bad credit rating you will need to improve your credit first, become a property finder for other investors, do quick deals to generate cash flow and build equity. If you are an investor with high income and tax problems you may look to buy negatively geared properties or land with high capital growth potential. A high net worth investor will look at buying commercial buildings, shopping malls or overseas investment properties.

The importance of having an investment plan can not be over emphasized. Your plan will be defined by the starting point of your journey and the final out come you wish to achieve. If you do not know the starting and the finaldestination points you will not be able define the investment strategy you need to follow.

Your starting point will be defined by your knowledge of real estate investing, the amount of capital and cash flow that you have. It will also depend on your risk taking profile and your age. If you are young you will be able to take more risks but if you are older then you need to be more conservative.

The destination point will be defined by the scale of your ambition. Real estate investment strategy you use will also depend upon how fast or how slow you wish to reach your destination and what kind of time and effort you are willing to devote.

Someof the strategies that you can use to increase your profits are enumerated below:

Property Assignment- In this strategy you negotiate and find a property deal. Get the property under contract and then pass it on to a real estate investor for a fee.

Contemporaneous Settlements- This is a property transaction in which you buy and sell property on the same day. If this investment strategy is applied correctly you can make a fantastic profit without having the need to settle or raise a mortgage.

Buy off the Plans - By using this strategy you benefit from the developers and buy property at a discount off the plans.

Delayed Settlement - By putting a property under contract and delaying settlement you get the advantage of capital growth when the market is moving up. Alternately you can use the time to make improvement to the property and increase its value.

Cash Back Contracts - These are used as an investment strategy to maximize your purchasing power to keep buying more property. This strategy increases your leverage and reduces your risk.

Use Credit Cards to Purchase and Renovate Properties - This is a good strategy wherein you use zero interest money from credit cards to make the down payment and increase the value of your property through renovations. You then refinance the property to pay of the credit card debt before it becomes due.

Use Non Traditional Lenders- By raising capital from second tier lenders, private investors, equity partnerships, bridging finance you can pump up your profits dramatically.

Vendor Finance - By using this investment strategy you can buy No Money Down properties.

Negative Gearing -When this strategy is used correctly it is like getting interest free loans from the Government in form of tax refunds.

Equity Release - This is another great investment strategy to use your equity to either buy more real estate or fund your life style. Better still the money is tax free cash.

Lease Options - There is a saying in real estate that it is not how much property that you buy which matters but how much property you control. By using lease options strategy you can control a very large amount of real estate without actually buying it. There are many variations to this option that include lease option downwards, lease options upward, sandwich lease options and investor package lease options.

Room by Room Rentals- By using this strategy you can increase the cash flow from your property by providing affordable accommodation to students, travelers or business people.

Fixer Upper- This is a popular strategy with investors who wish to raise the property's potential value to get a return on investment.

Cash Recycling- In this strategy you use cash from your savings to buy properties at a discount and then recycle your cash by refinancing the property after renovations.

Revisionary Deals- Revisionary Property Investment (RPI) is a strategy in which you buy residential properties at 50% to 60% discount from elderly home owners and allow them to stay in the property by paying a nominal rent.

You also have 'buy and hold' strategy as opposed 'flipping properties'.Then you have different strategies for buying properties at an auction or tender, pre-tender or auction or post tender or auction.

Many investors become experts at buying properties at short sale, foreclosures or mortgagee sales. By applying this strategy alone you can become a very successful real estate investor.

Then there are various investment strategies aimed towards retirement planning.Many people buy property to generate passive income so that they can go into early retirement and live life of leisure.

Each real estate investment strategy has its place and can be used effectively to meet your stated goal in life. Which strategy you use at a particular point in time will depend upon your plans based on personal circumstances and the position of the property cycle. But what ever strategy you use you should do it with a very clear objective. You should always have an exit strategy in place in case things don't go as per your plans.

You will need to understand various types of investment strategies that are available and use the most effective strategy to enhance your goals.






I agree

A lot of what you talk about here, I have heard of. What is vendor finance?


JoyceC wrote:
A lot of what you talk about here, I have heard of. What is vendor finance?

That is basically when the seller of a property agrees to owner finance.





Would you be able to take out a mortgage on a property, then a short time later take out a cash-back refinance on it to have repair funds?

Thanks sistreat

You learn something new everyday in this business.