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Property Types

Types of Real Estate

 

Make sure to familiarize yourself with different types of Real Estate.  There is commercial, residential, industrial, or foreclosure property to get to know.  Familiarizing yourself with all of them will help you understand what type you are most comfortable with.  Search commercial listings, MLS listings, and sign up for free trials on foreclosure sites.  Get to know the real estate listings and what is in your target market. There are two types of properties in particular that are very easy to start investing in:

 

· Foreclosures: Investing in foreclosed properties is one of the easiest ways to find a deal when you’re investing in single family homes.  These houses have been foreclosed on by the bank and are now bank owned properties, or REOs.  An REO house will very often need a moderate amount of work done to it before it can be resold, but that’s where YOU make a killing.  Once purchased and renovated, these houses can be sold for more money (essentially flipping the house), or rented out for investment income (make sure the rent covers the mortgage and other expenses, or course).  Flipping REO homes is a decent enough way to make money relatively quickly, but be careful not to bite off more than you can chew.  Some projects are very complicated and are not for beginners.  There are a few websites that offer free trials for searching for REO homes, and I recommend you give them a shot.  It’s worth the few minutes to get a feel for what types of deals are available through foreclosures in your neighborhood.  Try out Foreclosure.com and RealtyTrac for free and see what’s out there (window shopping!).

 

 

· Commercial Property: Many people say that commercial property is not for the beginner investor.  I disagree.  I think the opportunities here are endless.  Purchasing commercial property is equivalent to purchasing a business.  Banks most easily look past borrower flaws in this type of real estate.  They just want to see that the property cash flows.  A borrower is not expected to qualify for a commercial loan based on his/her qualifications as a borrower because most people would never be able to secure a commercial note as they would a home loan.  When you purchase a home there is only one person to look to for a payment—the borrower.  In commercial property, the business will make the payment.  In the case of apartments, renters will pay the mortgage.  In the case of retail centers, businesses will make the payments.  A commercial loan, for this reason, will NOT appear on your credit report.  I repeat, a commercial loan will NOT appear on your credit report!  A commercial loan will never be counted against you or for you personally (through bankruptcy or foreclosure).  It is a business.  Don’t just take my word for it.  Go ask various lenders and bankers what they know.  

It’s ok to dream big, but more reward requires more planning.

Building your comfort zone

Sunny days ahead