Millions of homeowners who are delinquent on their mortgage payments face certain foreclosure if they’re unable to work out an acceptable solution with their lender. Knowing the answer to the all-important question of “What is a short sale?” can help a savvy real estate investor to capitalize on the opportunity to snap up bargain-priced properties at a substantial discount.

The answer to the question of “What is a short sale?” is simple enough: It’s a negotiated discount where a lender agrees to accept less than is owed on a mortgage as payment in full for a property. For instance, if a homeowner owes $194,000 to the lender, the lender might be willing to accept as little as $100,000. This will allow the homeowner to avoid foreclosure, more extensive credit damage, and will also let them begin the process of rebuilding their financial life, while giving a real estate investor the chance to purchase a property at a massive discount.

While most homeowners can grasp the short sale concept, the biggest question they may have is: What is a short sale going to do to solve their short-term financial problem – and how will it keep their credit from being even more severely damaged than it already is? If you can answer this question to their satisfaction, a distressed homeowner will likely take the lifeline that you’re offering them.

By sitting down with the distressed homeowner and clearly explaining just what is a short sale to their financial future, you can provide a solution to their financial trouble and can help them to get on with their lives, you can often convince reluctant homeowners to do business with you, especially when they realize that they have relatively few good options when faced with impending foreclosure.

Are you thinking about how to invest in real estate? Congratulations and welcome to a fun and potentially lucrative industry. But before you jump into how to invest in real estate, make sure you know what exactly you want to do within the industry. There are plenty of choices and some of you will want to specialize in a particular niche while others may want to explore a variety of ways in how to invest in real estate.

Let’s discuss a few options:

• Flipping Houses – One of the most popular ways on how to invest in real estate is to flip houses. This basically means you are purchasing a home at a low cost and then selling it for a profit. There are three main ways this is done. First, you find a house for a bargain because the seller is highly motivated to get rid of the house quickly. This could be for an impending move or because of personal financial issues. Another option is to find foreclosure properties. Often the bank will let a house go for under market value to make themselves whole. The third option is to find a house that needs fixing up.

• Fixer Upper Homes – This brings us to one of the other most popular ways on how to invest in real estate. Fixer upper homes are usually thought of under the same umbrella as flipping houses but because it is a specialized niche, we should discuss it separately as it has its own unique issues. If you are considering fixer upper homes as how to invest in real estate, make sure you have the skills, capital and means to get the job done quickly, efficiently and at the lowest cost available. You need to consider your initial sales price as well as the additional money and time it will take to get the house improved and livable. Then, you need to be sure you can sell the property in a short amount of time and at a profit from your total investment.

• Rental Roperties – While this can be a great way on how to invest in real estate, it also has its share of headaches. The initial investment calculations should take into consideration the difference between your investment in the property and your potential income from rentals. But, bear in mind that when using rental property as how to invest in real estate, you have certain responsibilities and hands-on concerns to deal with. You may not be able to rent the home immediately. You will have to deal with advertising the rental. You will have to screen potential renters. You will have to spend money on any major repairs or maintenance in the home. You may have to deal with the nightmare of eviction proceedings if the tenants default on the lease. This can either be done by you personally or via a property management company that charges a fee.

Regardless of what you decide on how to invest in real estate there are pros and cons. You just need to decide which ones you find most appealing. You also need to consider which ones will be most profitable for you and often that is taken on a case by case basis.

I know it can be really tempting to want to buy fixer upper homes. In today’s market especially when it is a buyer’s market more people who have some investment capital are looking to get into real estate. Real estate can be a lucrative investment if you know what you are doing but it can also spell disaster for someone who is not prepared and informed.

In today’s real estate crisis there is an abundance of homes that are empty and even more that are for sale due to foreclosure. But, you have to be careful when buying these homes because if they are fixer upper homes, you may be biting off more than you can chew. Many foreclosures and homes that have been empty for awhile will need some repair in order to get it livable again.

The advantage of fixer upper homes is that you can typically get into the house at a steal. You will likely pay well below typical market price. But, there’s a catch to that. The first thing you should do before buying fixer upper homes is to research, research, research! You need to know what typical homes in the area are selling for in prime condition. Find comparable homes that are not fixer upper homes and research their selling price in the market. This will give you a good basis for comparison.

Then, you will need to do a thorough inspection of the home and list everything you intend to do to move it from fixer upper homes to prime real estate. In order to do this you will need one of two things:

1. A lot of experience in construction to be able to effectively estimate the cost of all repairs and improvements or…

2. A solid, reliable contractor who will be able to get you a firm quote on all the necessary repairs and improvements on the house.

Once you have the price it will cost for the repairs, add in a cushion for unexpected contingencies plus an estimate for the time the home will be vacant and not generating income. Calculating these costs along with the asking price of the home will give you a good indication of what your net investment is going to be in the fixer upper homes. Is that less than the going rate of comparable homes in the area? Perfect, go for it! Is it more? You might want to rethink this particular property…or renegotiate the selling price.

So, let’s say you go through with the purchase of the fixer upper homes. You now have the task of putting into practice your research on the repairs, maintenance and improvements for the home. Keep in mind that the faster and more efficiently you get this done, the faster you can begin seeing a return on your investment. You can do this by renting out the house or flipping it to sell it at a profit. Beware, though of construction delays and those hidden problems that weren’t accounted for in the original bid.

If you know what you’re doing and have researched the area well, fixer upper homes can be a great investment.

Just be careful and good luck!

Whether you are looking to renovate a home or looking to build a new home, it is necessary to get a contractor to assist in the planning and building stages. Before conducting a contractor search there are many questions that should be answered and steps that should be made before hiring anyone. These are important in finding the perfect contractor for your job to ensure you get a quality result and have a reliable contractor. Conducting a contractor search is not difficult but ensuring you have the right one will take a little effort.

The first step in conducting a contractor search is to get the word out that you need one. The first place to start is in your local telephone directory. Call a few places and ask for proposals. Next, look in your local newspaper or community paper. A contractor search can also be done on our site for local contractors. Also check with friends and family in case they have a referral which is a great way of finding a reliable contractor.

When conducting a contractor search, there are questions that should be asked. Ask how long the contractor has been in business and if the company was ever run under a different name. Ask if there are any lawsuits against the company. Find out who he subcontracts with and make sure they are paid in a timely manner and happy to work with the contractor. You should do a thorough contractor search and get at least three proposals but five would be better and check the references of all the contractors. Make sure the references listed are not related to the contractor in any way. The more references supplied the better.

There are requirements for being a contractor and you should ensure each candidate meets the necessary requirements. A license to work is usually needed. You should verify the contractor’s license with the state agency before hiring. Also check out their insurance policy for worker’s comp and liability. Verify their status with the Better Business Bureau and you should have a successful contractor search.

If you are considering purchasing handy man specials you likely already are aware how lucrative an investment it can be.  You can purchase handy man specials at a low cost because it needs some repair and then sell the handy man specials for a profit.  Sometimes this profit can be quite significant.  When looking for handy man specials, try to find ones that need only minor repairs in order to make the handy man specials more appealing to buyers.  This will minimize the amount of additional cash is needed and maximize your profit margin.

When looking for handy man specials do a walk through of the house and start planning on what improvements should be made in order to sell the house for a profit.  Make a list of the all needed in the handy man specials and calculate the total cost of these repairs.  Then, once you have that price plus the asking price, consider the potential sale price for the handy man specials once all repairs and improvements have been made.  If your estimated initial investment is lower than the estimated sale price of the handy man specials, you are likely looking at an investment that will yield a profitable return.

Another consideration for handy man specials is how long the handy man specials will be on the market after repairs are made.  You want to be sure to minimize this time period as much as possible so you are not sinking more money into making house payments and interest.  The trick is to get the handy man specials into an improved state as quickly as possible then sell it as quickly as possible to minimize your investment and maximize your profit margin.  Make sure you have the experience and available cash to make all the repairs on the handy man specials that are needed.

To calculate your profit on the handy man specials, you will need to consider a few factors.  Your initial investment costs on the handy man specials which will include total purchase price including interest paid, cost of improvements on the handy man specials and your time.  The difference between that and the sale price of the handy man specials less any closing costs and fees will be the amount of profit made on the handy man specials.  The more profit you make on the handy man specials the more liable you are to repeat the process.  If you are successful at flipping houses, you can find you are making a lot of money with handy man specials.

Real estate wholesaling is where you take a property you own and sell it to an investor for a profit in order for that particular buyer to sell it, also at a profit. Sound complicated? It’s not really, just think about wholesale retail which most of us are familiar with. You have a product. You sell it to a retailer at a small profit. The retailer then sells it to the consumer for an even greater markup. The same principal applies to real estate wholesaling. You have a property; you sell it to a buyer who in turn sells it at a greater markup. You get a profit; the buyer gets an even greater profit.

So, why not just cut out the middleman and sell it at a higher profit yourself? There are many reasons why real estate wholesaling can be beneficial.

The primary reason for real estate wholesaling is to get fast, easy money. You are selling at a bargain so some established investors may be very willing to snatch up the property to put the time and effort into it needed to flip the house. Perhaps you need the extra cash. Perhaps you just want to build up your reserves for additional investments. Regardless, you don’t have to worry about the details of fixing up the property, listing it, negotiating, selling and closing. You leave that to the buyer.

Maybe you are an investor and want to get out of the business. Perhaps you simply are a bit over extended and have a variety of houses. You can sell in bulk and get out from under multiple mortgages at one time. You are still making money but at a lower rate of return. If you are selling houses in bulk though, the sum of the profits will make real estate wholesaling lucrative for you. You can then decide what to do from there.

The convenience of real estate wholesaling is another reason some investors decide to go this route. You are not tied to a particular profit margin or expected return on investment. If you are making money at all, wonderful! You can keep a property or get rid of it as you want to without having to go through all the complicated details of selling directly to a consumer.

In order to make real estate wholesaling attractive to a buyer, you will have to ensure they will get the bulk of the profit from the final sale. So, you are definitely going to make less money. But you also will have more immediate funds and still make some profit from your initial purchase. Also, you will not have to deal with all the time and hassle of trying to fix up the house and sell it to the end buyer.

What is a property investment club? It is a group of people who come together in order to make money by pooling resources to purchase properties or to network among one another to assist each other with individual property investments. Theoretically, the profits from the property investment club are split between its members when it is used for group purchases. That all sounds great and might seem like the perfect way to get started in real estate investing but not all is always so wonderful. There are some great property investment club founders out there who are doing precisely as it is intended. However, there are also some more shady founders of a property investment club whose entire goal is to separate you from your money. The founder or founders are definitely making a profit, but are you?

As with any type of investment it is advisable to know the risks and research thoroughly and a property investment club is no exception. There are good ones and bad ones. Before joining a property investment club, understand the specifics regarding membership. Here are the top ten questions to ask the potential property investment club:

1. How are members screened or is anyone accepted?

2. Is there a fee to join?

3. What is the minimum investment I have to have?

4. How are properties evaluated and decided upon?

5. Is there networking opportunities within the property investment club?

6. What are the qualifications and experience of the decision makers or board of the property investment club?

7. Aside from real estate are there other streams of income that are generated from the property investment club such as books or videos targeted to members or the general public?

8. What is the success rate of the property investment club and how much does each member make on average?

9. How long have you been in business and what is the structure of the property investment club?

10. How do I leave the property investment club if I so desire?

If all your questions are answered satisfactorily and you think you can benefit from joining the property investment club, then it probably is a good deal. But be wary of high investment requirements as there are typically no guarantees for a return on investment. Also be wary of networking clubs that charge a high annual membership fee. You may be able to get some contacts and go to a few classes but is it really worth it?

Before joining a property investment club, investigate your options for making money in real estate on your own. Consider networking opportunities that don’t require annual memberships. Consider seminars and classes I your area that are paid on a per occurrence basis. A good property investment club can be a valuable source of information and can help you make a profit while getting your feet wet. However, the scammers are also out there so make sure you do your homework before committing to anything!

For those of you who are thinking about getting into real estate investing, you are in for an exciting time! You also may very well be in for a making a pretty good profit if you know what you are doing. Real estate investing can be really lucrative but you need to know how to maximize your profits. For some tips for investing real estate money, people who have experience will give you good advice.

Never underestimate the value of networking with your peers in the industry. Networking for tips for investing real estate money is a great idea. Also, do research on the Internet and in local real estate magazines for tips for investing real estate money and use your common sense above all!

To get you started, though, here are the top five tips for investing real estate you should pay attention to if you want to be successful…and who doesn’t want to be successful?

1. Do your homework. You have to be familiar with your industry to make a profit from it. Understand the various options for real estate investing including flipping houses, wholesaling, fixer upper homes, rentals and commercial spaces.

2. Make sure you know your area and the prices associated with your particular transaction. For example, know rental prices, current market conditions, repair costs, etc. depending on the type of investment you are considering.

3. Don’t get emotional. This is a business opportunity and a financial investment. Don’t get too caught up in the process or invested in a particular house for emotional reasons. There are always other houses. Know when to walk away when it won’t be lucrative enough.

4. Understand various financing options. Some financing options are better than others and some are better suited to different situations. Understand the ins and outs of mortgage loans, IRA investments and hard money loans to determine which option is best for you.

5. Secure your financing first. You don’t want to find the perfect house and then have financing fall through. Get pre approved for loans or have our financing options readily available to you when it is time to act.

Those are the top five tips for investing real estate but there are certainly many others. A lot of the tips for investing real estate will come to you as you gain experience in the investment game. If you prefer a particular investment niche the tips for investing real estate can become much more specific also. You will need to be familiar with all the aspects of investing from finding the house, to securing the sale to advertising and selling or renting in order to maximize your earning potential. However, once you start researching and getting some experience, you will have all the tips for investing real estate you will need to make a successful venture.

Whether you are a seasoned real estate investor or new to the industry, you will definitely benefit from using real estate marketing strategies. If you have a house, whether it is a fixer upper you intend to flip or a primary residence you just want to get from under, real estate marketing strategies will help you unload the home quickly and for a profit. Remember that the key to selling the home as quickly as possible is to expose it to as many potential buyers as possible.

Savvy investors who are in the know about real estate marketing strategies will tell you to diversify. The more real estate marketing strategies you have at your disposal, the more liable you are to attract a wider base of potential buyers. Obviously the more potential buyers who are aware the home is for sale, the more liable you are to sell it quickly to a qualified buyer in the price range you desire. You may even get into a bidding war from a few buyers and can get more of a profit than you even expected!

Make sure when considering real estate marketing strategies that you look to both online and offline methods. Nowadays, more and more people are looking at the Internet to narrow down their housing choices but don’t discount the drive by and real world buyers as well. You never know where a lead will come from, so cover all your bases.

So, let’s talk about some offline real estate marketing strategies. Consider a few of these tried and true methods for offline real estate marketing strategies:

Signs – Every house for sale should have a sign in the front yard with contact information. Those in the neighborhood, visitors or renters looking to buy can come across this and call for information.

Advertising – Radio, television, newspaper, neighborhood bulletins and local real estate magazines are perfect to get the word out about your property.

Flyers – Have a few flyers printed up and place them in local businesses and also have them available at the house.

Networking – Don’t ever underestimate the value of real estate marketing strategies with peers. You may know realtors or business professionals in the area. Make sure they know to get the word out. A referral is one of the most common ways to get new business and real estate is no exception.

Now that you have some real estate marketing strategies for offline use, you should look to the Internet. Online real estate marketing strategies are fast becoming the most popular way to get information on houses.

Online house listings – Using this will allow people to search through homes to find ones in the area and get details and pictures.

Web sites – If you have your own website to feature the houses you own you can use various real estate marketing strategies to enhance traffic to your site including pay per click advertising, article writing, search engine optimization and affiliate advertising.

Just remember that the more real estate marketing strategies you employ the more exposure your house or property will get. If you have more exposure, you will have a better likelihood of selling your home or property quickly.

Hard money finance can be a means to an end for some people and it can be beneficial. But, it really should be thought of as a last resort and not something to bank on for a long term solution. There are a few advantages to hard money finance but there are a ton of risks. Before discussing the pros and cons of hard money finance, let’s first define what, exactly, it is. Hard money finance is a loan that uses your real estate as collateral and is generally given to those who are in a position to be unable to get a traditional loan. Usually these loans are offered by private companies not banks.

So, you can’t get a traditional loan but you can get hard money finance. What’s the problem? Sounds good, right? Here’s where we discuss the cons:

First, hard money finance loans are usually secured with your real estate which means your home or property. This in itself is risky but not more so than a traditional mortgage which basically does the same thing. But, the loan itself is usually set at a much lower loan to value ratio than a mortgage. For example, say you have a home worth $100,000.00. The maximum amount you would likely get from hard money finance is $70,000.00 or 70% of the value. Often the ratio is even lower than that.

Next, the interest rates on hard money finance are exorbitant. Where a mortgage may have varying rates depending on your credit score, hard money finance starts high regardless of how pristine your credit is. While an estimate for hard money finance interest rates can not be accurately made because it varies greatly depending on the real estate market, most will start no less than fifteen percent. That’s a pretty high interest rate to get into!

So, you know what your risks are: you will likely have a huge payment, high interest rates and a low LTV rate. Are there any advantages to hard money finance? Yes. Is there ever a time you should use hard money finance? Sure.

Hard money finance is easier to get into. Credit is not usually an issue. You get your money faster also so you can spend it on what you need to. So, there are certain situations where hard money finance makes sense. In the case of getting into a fixer upper property or in bailing yourself out of a possible foreclosure, hard money finance can be just the ticket. But, hard money finance is beneficial if only used as a short term solution.

For example, say you are about to have your house foreclosed on because you lost your job. You can get hard money finance and save your home. If you gain employment and are able to refinance in a traditional manner, while you may have paid extra for the creative interim financing, you still have your home and the bulk of your investment. Or, if you have a fixer upper home a traditional mortgage company will not touch, you can get hard money finance if you believe you can flip the house or rent it and turn a profit quickly to pay off the loan.