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Creative Real Estate
4 Basic Strategies You Should Know
© 2006 Joel Teo
Creative Real Estate
Investing refers to those methods
of purchasing and selling real estate that are considered
rather unconventional. The answer to the question
whether the techniques are unconventional largely
depends on whom you ask. While professional investors
argue that the techniques below are fairly commonplace,
the naïve investor might regard them as avant-garde.
This article will
highlight four ways to make more money
from Creative real estate investing.
1. Start out
One of the most prominent,
and rather scientific,
creative real estate investing technique is "bird-dogging".
Birddogs are crucial in the current real estate scenario.
They doggedly search for profitable deals for other
investors in exchange for a petty referral fee. Though
bird-dogging is not much of a lucrative career opportunity,
it's still probably the best way to kick start one's real
estate investment career. This is because, if an investor
can master the art of finding profitable assets, he/she
will always be a notch ahead of his/her contemporaries.
Thus, this strategy
is best if you have very little capital
to start with and want to learn how to invest in real estate
without risking your own capital. The knack of spotting a
great real estate investment comes with practice which
you can gain in this manner.
2. Using Options
to Control Property rather than own
Ever traded in stock
options? Trading in options is also
applicable to real estate. A property owner fixes a price
for an asset, and then may sell an option for prospective
clients to buy it on or before a set date in future. The
buyer of the option pays a premium for it, hoping that the
property will experience an increase in valuation. The buyer
may then exercise the option by buying property, or he
may sell the option to someone else. Options are a
fabulous way to gain control over a property without the
need to mete out scads of cash.
You would therefore
realize that looking for a property
that has a "bad luck" seller that is trying to sell as fast
as possible and doing simple and cheap things to spruce
up the property would provide the basis for healthy profits
in this case. Note here you have not spent a lot of money
to purchase the option to buy so it is not capital intensive.
3. Using Foreclosure
investing to buy property on the cheap
is another creative real estate
investing technique. When a property owner defaults on
several successive occasions, the lender may foreclose
the loan and opt for auctioning the property. The first step
of the foreclosure process is the filing of the notice of
default, which normally takes several months. During this
prolonged procedure, a foreclosure investor might step in
to stop the foreclosure. He may buy the concerned
property from the owner who, being financially distressed,
may sell it at a low price. The investor may then sell the
acquired asset at a significant profit.
You would want to
avoid purchasing the property without
inspecting it prior to an auction since Real Estate Law
presumes that you have constructive knowledge of anything
that could be reasonably discovered upon an inspection of
the property so you would want to spend some time to
check out the property with a good property inspector
before diving into the deal.
cheaply and selling the property at a huge profit
talked over and creative real estate
investing technique is termed as "rehabbing". This
method involves buying a typical fixer-upper (a house
that requires enhancement or refurbishing and usually
sells at a below-market price). Sometimes the fixer-upper
may not require much renovation, and slight ornamentation
and paint could suffice. At other times, significant amount
of work might be needed to convert a shabby house into
a fine abode. Since this field intrinsically involves more risk,
and often more work, it typically offers loads of profits.
The best way to learn
how to do this is to spend some
time watching the Reality TV shows that do an extreme
makeover for properties to learn how people make run
down properties look really great. If you are pleased with
the new look of the property and the valuer thinks so to,
then you can make more when you sell the property.
In conclusion, creative
real estate investing when taken in
the broader context involves you taking some time to learn
all the various real estate investment strategies used by the
best real estate investors out there and putting it to work.
Always play to your strengths and choose a strategy that
invokes the best in you and you will succeed in whatever
About The Author:
Copyright (c) 2006 Joel Teo. All rights reserved. (You may
article in its entirety with the following author's
information with live links only.)
Joel Teo writes on
several financial topics and ways on
making money including Property Investment. His website, http://www.realestateinvestment101.info/Property_Investment.html
provides a wealth of informative articles and resources on
everything you need to know about Real Estate Investing.
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