There are many ways to make money in real estate. Unlike the stock market or most other asset classes, real estate is what’s called an ‘imperfect’ market; each property is unique, immoveable and illiquid; It creates an enormous opportunity for anyone ‘in the know.’
Real Estate is also highly leverageable. You can control a very valuable asset with little (or no) cash investment. Small amounts of appreciation (or decline) in the property’s value have an exponential effect on your profit or equity.
Broadly, real estate can be wildly profitable for two reasons:
- Transactional Income (Forced Appreciation)
- Generational Wealth-building (Automatic Appreciation)
Transactional income focuses on strategies and tactics like short sales, probate investing, foreclosures, tax liens & tax deeds, wholesaling, lease options, flipping, and at certain times of the cycle, pre-construction, subject to’s, rehabs and many other niche strategies.
Transactional income techniques help you “Force” the appreciation by creating value somewhere in the process. You ‘buy low’ and ‘sell higher’ forcing the appreciation.
Generally, forced appreciation requires you to find motivated or less knowledgeable sellers, add value through things like rehabs, be a better marketer, build an efficient acquisitions funnel or otherwise work hard and have an inside track… you FORCE THE APPRECIATION through your skills, knowledge, and effort.
When you hear stories about millionaires making their money through real estate, realize that they didn’t get there by generating lots of transactional income, they got there through leverage and “Automatic Appreciation.”
You don’t need to decide between one or the other:
Automatic Appreciation can be combined
with Forced Appreciation strategies.
Automatic Appreciation investing is when your profits come from the value of your property going up naturally or ‘Automatically’ – just because of when and where you acquired it – just because you own (or control) it. You don’t have to do anything fancy or hard other than getting the “Where & When” correct. Click here to see how
Automatic Appreciation works for EVERYONE!
It’s lower risk because hot markets are very forgiving. You can make more than your share of mistakes and still come out looking like a genius!
There is massive upside potential, and there are unlimited acquisition candidates.
You don’t have to locate motivated sellers if you don’t want to. You could go into a market and buy properties all day long for full-price and still create profit windfalls.
You don’t need to do short sales, pre-foreclosures, wrap’s or anything else unless you want to!
If you buy a house in an appreciating market, using ANY method, you can profit!
Automatic Appreciation can be combined with any forced appreciation strategy to multiply your returns!
The Key is your knowing local real estate cycle.
Whatever your preferred strategy is, would it help if you knew the market was in a hot, emerging part of the cycle? Or if it was flat-lining? Or if it was about to crash?
Nothing is more important to your
real estate investing success (or failure).
Whether you invest in commercial or residential real estate or pursue transactional Income or generational wealth building if you don’t know where your market is in its cycle, how can you possibly pick the best strategy for maximizing profit and minimizing risk?
Last update of the article: 03/30/2020.