Real Estate Investing: Beginners Guide For 2008

By: Michael Shane Wilson
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[ Posted On: 2008-08-04 ]

If you want to make money in real estate investing in 2008 then its going to take a different approach then when the market was running steadily along. I like to basically take the approach of doing rehabs to pay down your debt and to build your cash reserves and then focus on buying rentals and using flips to pay them off.

Unfortunately, I would not recommend flipping to anyone due to all the hassles involved now. Finding a buyer is difficult and when you do find a buyer your only option left to sell on 100% financing is FHA which in combination with lenders being so tight right now its tough to get a home sold. So if you want to invest in real estate how would I recommend you get started now?

I believe as a brand new investor you need to focus on buying 1-2 properties this year and holding them as rentals or rent to owns to eventually resell when the market changes again. Here is the step by step break down on how I would do it as a brand new investor.

1) Talk to your commercial banker. Get pre-qualified for an 80% loan.

2) Find your source of funds for the 20% down. I recommend an equity line or a private lender.

3) Find your deal

4) Buy your deal and place your tenant in it

5) After 6 months go to another local commercial banker and refinance for what you owe and place a line of credit on your equity. Do not pull out all of your equity. You may want to pull some out for profit but do not pull it all out.

6) In a few years when the market changes sell the homes and take home a substantial profit due to the low prices that are out there right now.

This is how I recommend a new investor who has a stable income and a credit score over 620 to get started. Once the market picks up again then you can revert to doing rehabs to flip for profit but for right now be conservative, buy what you can comfortably handle, and understand that any profit you make will come off of credit lines and refinances in these houses.

Now, what if you have no credit and no cash and you want to get started in real estate investing? This will go into detail about how to wholesale and assign contracts. Here is your guide.

1) Network and get to know every investor in town. Find out what they buy and ask if they would pay you to find a good deal

2) Find out which attorney in town understands investors and how they work.

3) Find a deal and put an escape clause in it.

4) Sell the deal to one of your investors.

5) Build cash and fix your credit with the profits until you can eventually buy a home.

This is how I recommend a new investor get started in 2008. The game has changed but there is always a way to make money if your willing to believe that you can make money, and you supply the action necessary to make it happen. Go to my blog where I share more tips and information that will help you to make money in 2008 with real estate investing.

Article Source: http://www.afroarticles.com/article-dashboard

About The Author: Shane Wilson is a full time real estate investor. He runs his own real estate investing business blog at georgiabuyer.com. There you can find free information, advice, and tips to help make your real estate investing career a success.

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