Real estate investing continues to be one of the best ways to produce investment profits. Many investors have been frightened away by the instability of the stock market, but the real estate market continues to provide tangible, performing assets that bring in money through a number of methods. Many of the smartest investors across the country have been investing in real estate as a way to make money.
One of the best things about investments in real estate is that there are so many ways to make money. Some investors buy foreclosure properties, which are repossessed and therefore sold at up to 50% below market value. Investors enjoy instant equity in these discounted distressed properties, and this equity is useful when borrowing against the property or when flipping houses. Flipping real estate involves buying a home for less than its full value, renovating it, and reselling it quickly at a profit. Investors can also choose to rent out a property they have purchased or can hold the property and resell it at a later date. Some investors choose to invest in tax liens, which allow them to borrow money to homeowners who owe property taxes. The real estate market provides many options.
Many real estate investors are attracted to pre-foreclosures. These properties are owned by homeowners who have fallen behind on their mortgage payments. After a few months, the lenders file a lis pendens or notice of default, declaring their intention to foreclose or repossess the property. Until the property does go to auction as a foreclosure it is considered a foreclosure and the homeowner still has the right to resell or refinance the property. During this stage of the process, homeowners are eager to develop a deal with investors or to sell below market value to save their credit ratings and to avoid foreclosure. Savvy investors can structure deals that benefit both the investor and the homeowner. Through these deals, the homeowner gets a fresh start financially and the investor gets a great deal on a property.
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