I’ve been very curious about getting into real estate investing. Normally, I would sit here and tell you that you should buy real estate and hold onto it for years upon years. But, what’s the fun in that? Being a landlord can be very annoying. I know people that have a several properties that they have owned for quite a while, and they will probably liquidate those properties to retire on. But, the hassle involved with being someone’s landlord does not appeal to me. I’m smart enough to know that the picture painted by infomercials and motivational real estate books are not reality when it comes to buying run-down properties, fixing them up, and reselling them for a profit.

Here is a good article to keep us all in check when we start thinking about quitting our day jobs to flip houses. Click Here for the Bankrate.com article

So, if you want to make money buy investing in fixer-uppers and reselling it for a profit, what’s the best way to do it without losing your shirt? Once I am in the position to go through with it, this is the plan that I have devised which seems to make the most sense:

1. Build up a decent amount of capital. You need to have some cash in the bank to cover most of the construction costs, mortgage payment, and utilities. Even if you get a 100% down loan, you’ll still need some cash to get the job done.
2. Find a small fixer-upper that you can really steal. I’m thinking in terms of finding a $150,000 house or condo for $80,000. Don’t go for a $500,000 house that you can get for $350,000, because that is the kind of deal that could make you go bankrupt if things go wrong. Starting small and working your way up seems to be the method that works best.
3. Be cautious about what you buy. Look for those properties that are cosmetically bad. You want a property that’s trashed on the inside with horrible landscaping. You don’t want a house that needs foundation work or a new roof.
4. Surround yourself with people you trust. If you don’t know anyone in the construction business, then don’t start investing in rehabs. You need to get the job done efficiently, and it needs to be done right. Poor workmanship always shows up in the final product, and you can’t have a contractor that works four hours a day, two days a week.

So, that’s my take. I would like to get your tips and experiences with real estate investing. Do you agree with this? Do you think it’s better to buy houses and hold onto them? Shoot a comment below.