Methods for Making Money in Real Estate Investing

1. Flipping houses: Flipping a house is a term that refers to purchasing a house that may need cosmetic improvements or other changes to force appreciation or change the use of the property in increase it's value or ability to generate income and reselling the home for an amount larger than original investment and cost of upgrades.
2. Wholesaling: This is also sometimes referred to as "flipping". Specifically, wholesaling is a process of purchasing property significantly lower than market value, usually either to sell quickly at or closer to true market value; or to use as a rental. The best part about wholesaling is that this method provides quick cash in the investors account because homes are bought lower and sold higher quickly.
3. Rental Properties: This is a tried and true method for making money as a real estate investor. It's important that the real estate investor purchase rental properties that have a positive cash flow after taking into account taxes, maintenance, property management, and vacancy; where the rent collected from the tenants are more than making the payments on the property mortgage. Rental properties can be a steady, long-term return on initial investment on the front end.
4. Tax Deeds or Tax Lien Certificates: A Tax Deed or Tax Lien Certificate is a legal document that conveys ownership of a property to the purchaser. When the original property owner has been delinquent in paying their taxes the County Tax Collectors foreclose on the property and offers it for sale at a public auction to the highest bidder. The property acquired at auction can then be sold at a profit or held as a rental.
5. Discounted Paper: Also known as "note buying" which is when notes or mortgages are purchased at less than the face value of the loan. For example, a real estate investor could purchase a note for $100,000 and pay only $75,000. The real estate investor that buys mortgage notes is looking for a specific yield and receiving repayment over years of time fit the investing objectives of the investor.
6. Private Money Lending: Many investors are looking for a secure investment with a higher rate of return. Real estate investments provide security; and if the investors lend money privately to someone who is purchasing real estate the rate of return is typically higher than savings or other secure investments and if they borrower defaults on the loan the investor can foreclose on the property.