Thread: This should come from Pro's

The best reward about real estate investing is the fact that you have created something that you know will carry your name. The least rewarding is waiting for a profit and the unstable housing prices thru the years.

Disagree entirely with the above post. It's all about ROE (return on equity) versus ROI which a lot of people get hung up on.

I've only done one building thus far (bought for 750 - build out 200 - sold for 1.6) but I went the quick return route. Mostly it was to turn my small amount of cash into a larger amount of cash so I can get in on 2 or 3 projects next as opposed to just one. That said, right before the close of the final unit I really started to consider the pros of renting versus the quick flip.

Bottom line: the pros of investing really start stacking up when you applied to rental property when compared to the more immediate satisfaction of selling off. Renting a property for 10 years then selling will yield double or triple the net ROE.

Low-risk investments is one advantage of RE but the on going costs associated with a property, ongoing maintenance costs, especially with an older building, can be substantial.

Here is an article that shares both advantages and disadavantages of having real estate investments. You can read it now - The Advantages and Disadvantages of Real Estate Investing - TRCB . Hope it helps you

Interesting.. thanks for sharing the article.

The negative is you are taking on more risk than the average buyer - the positive is that because you are taking on more risk, you also get a greater reward. There are many options when it comes to buying, repairing and reselling real estate in ways that reduces your risk and increase your cash flow. For instance, if you buy in a down market with cash you should be able to get a discount which should add to your equity up front and will be an added cushion if the prices start to drop. When you sell with owner financing on terms, you can typically get a higher house payment plus the occupant handles all repair and maintenance. There are lots of strategies to use that can be combined to create above average cash flow and a big profit when the property sells. You just need to do your homework to learn how to combine them for the best result.

As with any investment strategy, there are pros and cons.

The way I look at it, at the end of the day, what benefits do you get out of it? Is it a way of making money that challenges you, gives you rewards not only financially but personally, and keeps you wanting more?

Like Albert Einstein said, "You have to learn the rules of the game. And then you have to play better than anyone else."