You and Real Estate Investing

Investing in real estate is one of the greatest ways to spend your hard-earned savings. Although some people might tell you that you have just doomed yourself by doing such a move, many experts would probably applaud and praise you for your decision. It is because according to them, now is the perfect time to try real estate investing or REI.

Because of the recent housing bubble and the ongoing economic recession, prices of real estate have gone down significantly. Although such a scenario paints an ugly picture of the country's current financial status, it provides investors with the opportunity to obtain great and nice-looking investment properties at very affordable prices. So if you want to get your hands on such lovely but inexpensive houses, then you should invest in real estate now.

There are three common ways to invest in real estate. The first method is by flipping houses. Flipping is the act of buying and quickly selling properties for profit. Investors usually purchase undervalued houses before selling them at a slightly marked up price. Contrary to what some people, believe, this type of REI is not against the law. Flipping is considered illegal only when it involves mortgage fraud or when an investor colludes with appraisers to inflate a property's market value.

As the name implies, rehabbing homes if the process of buying and fixing up a distressed house before selling it at a higher price. While most rehabbers hire contractors to help them renovate a property, there are some who carry out the repair job on their own.

Such a move, however, is considered risky by some investors because you can't entirely be sure that the buyer will be satisfied with the amount of effort you put on the property's repairs.

The third method is to wholesale houses. Wholesaling in the real estate business is basically the process of placing a property under contract and then selling the said contract to a third party.

According to many wholesalers, this type of REI is risk-free. Because you're not really buying a property, you don't need to have cash on hand or obtain loans. Thus, you don't have to worry about losing money in this business.