Building Wealth Through Real Estate in this Strange Housing Market

You might not know this crazy statistic but 90% of all millionaires either make their money or hold their money in real estate. That is partly because someone always needs a place to live, no matter the financial climate. This means, that even in 2024’s strange housing market, building wealth with real estate needs to be part of your wealth creation strategy. 

What is the fastest way to build wealth in real estate?

There are two primary real estate investment strategies to build wealth:

Buy and Hold: This is where you purchase positive cash flow rental property, hold on to it, and collect your rent over the long term. It provides a nice stream of monthly income.

This strategy includes long-term leases and short-term rental agreements. Anything longer than 6 months is considered a long-term lease. Short-term leases, less than six months, can also include Airbnb-type stays for vacationers or a slightly longer lease for people who are visiting over months, like digital nomads or executives. 

Quick Cash: This is where you use techniques that allow you to buy and sell real estate quickly. 

You can create a quick cash deal without having money for a down payment or the ability to get a bank loan if you use seller financing or a sales and purchase contract. This means that you can worry less about high mortgage rates in strange markets like the ones we are currently facing.  

Quick cash real estate opportunities also include fixes and flips. This is where you may have financing but intend to enhance the property and sell at a higher value in a relatively short time. 

The real estate investment strategy that you choose will depend on your particular situation and skillset. Regardless of the action you take, this next point is something everyone needs to understand about real estate investing. 

What part of real estate is most profitable?

There is an old saying in real estate: money is made on the purchase, not the sale. 

What does that mean? 

To get rich with real estate, you need to make a great deal on the property you purchase to be highly profitable. To do that, you have to know your numbers! Some of the ones you must understand are:

• The various interest rates on mortgages, HELOCS, business lines of credit, etc. 
• Property valuation 
• Comparable transactions in the area
• Cost of property improvements
• Appreciation rates
• Cash on cash return on the investment
• Real estate agent fees
• Net cash flow
• Loan to value ratio
• Operating cost (rentals)

After you have analyzed the numbers that can affect the purchase price and your profitability, you have to put your negotiation skills to work. You want to get the best deal possible on the purchase. It is through your numbers that you will be able to find ways to reduce the purchase price. 

 

 

Where to invest in a strange market?

If you can’t find a great deal in your area, you don’t have a lot of money for a down payment, or mortgage rates are really high and you want to hold off on purchasing a property, you may want to consider investing in Real Estate Investment Trusts (REITs).

REITs are investments that typically provide dividends and give you the potential for a moderate long-term capital appreciation. Their long-term returns are similar to stocks, they tend to provide a steady stream of income, even in difficult times, and they are traded on the major stock exchanges, making buying and selling relatively simple. 

They can give you a nice and steady stream of income, helping you build wealth in real estate, without the responsibilities that come with owning physical property.

How can I make more money in real estate?

This is a tip that many real estate experts might not give you or even realize the depth of its importance…

GROW YOUR POWER OF ASSOCIATION!

Now that you know that money is made on the purchase, not on the sale, the people in your network can help you improve your profits! Get to know:

• Real estate agents 
• Tradespeople and handymen 
• Real estate investors
• Property managers
• Real estate attorneys
• Insurance representatives and brokers
• Mortgage brokers
• Inspectors

Building this kind of referral network can help both parties bring in leads, find real estate opportunities and possibly reduce overhead costs too, making real estate investing even more profitable! 

But before you start investing in real estate, do your research! 

When it comes to the fundamentals, there is much to learn, including what to look for in real estate investment opportunities, cash flow strategies, debt leverage strategies, protecting your assets, tax advantages and more. Increasing your knowledge will help you grow your wealth through real estate, especially in a strange real estate market like this!

If you would like to get guidance from a real estate investor and wealth creation expert, I encourage you to get my Creating Wealth through Real Estate Course. It will show you exactly how you can establish and accelerate your wealth through real estate. CLICK HERE TO GET IT NOW!