subject: Gold Or Gimmick? [print this page] Gold Or Gimmick? Gold Or Gimmick?
If you are ever up late at night, you may see many commercials promising to show you how to make millions in real estate without putting any money down. Sound familiar? Just so you know these people are actually making their millions of profit by selling you useless information. It is true that you may not need a excellent credit and a surplus of cash to get started in real estate; but you do need to know what you are doing.
You could always start by making quick sales'. In order to do this, you must understand the basic terminology in this endeavor. For starters, you have retailers and dealers. Retailers by properties and sell them for a quick profit. This is definitely high-risk, but when all goes well the reward is worth the risk. Contrary to the late night real estate gimmicks, retailers normally need a substantial cash flow and above average credit ratings.
Dealers are individuals or companies that sell contracts. They are normally in search for bargain properties and sign purchase contracts with their sellers. Dealers then sell these purchase contracts to retailers, making a solid profit in the process. Dealers normally flip contracts for up to $5,000 without ever taking possession of the deed. You may ask "how a dealer would then make most of his profits? " Well, dealers generally make their profits from double closings. A double closing allows the dealer to earn a higher profit. A double closing begins with the dealer signing a purchase contract with the property owner and the retailer. This way the retailer promises to buy the property from the dealer at a higher price and deposits the amount in escrow. The property owner signs the deed to the dealer, who then signs it to the retailer. The retailer then signs the loan documents, and the process is complete - the property owner is paid his asking price, and the dealer is paid the difference. Note that the dealer came to the table with no money, and her credit was never an issue.
In short, there are many ways to start a career in real estate; thus I have named a few above. However, please keep in mind that there are ways to profit from real estate without significant financial investment, however, that is not to say that success comes free and easy. At the very least, you will need to make a substantial investment in yourself. In order to succeed, you must be willing to work hard. Even with a million dollar real estate portfolio, your brain will always be your #1 asset. Be sure to invest in your education on a daily basis, and learn as much as possible about your local market, real estate law, and investment strategies.
