Real estate investing and house flipping is a huge field with large profit. Throughout, owning a real estate has always been the common way to increase wealth. However, these days the internet is full of misinformation regarding the business. The misinformation normally spring from pessimism.
On the other side, impracticality normally discourages prospective house flippers from realizing the situation’s reality, that nothing is perfect.
Lots of these myths are perpetuated by the public or the media, but not by the real estate investors. To overcome your fear of investing in real estate, you should first not pay attention to the myths that you might hear such as the ones below:
1. You must have money to make money
Among the most common myths concerning the business is that investing in real estate is only for the wealthy. Most people believe that you must already have a great amount of expendable income to buy a property.
Although money make things easier, it’s still possible to purchase properties without your own money. Lots of flippers choose to buy properties using loans. Eventually if all goes well, you’ll make enough expendable income and you can then manage to pay for the properties in cash.
2. You Won’t Get Funding with bad credit
There are several other ways to acquire the money needed to invest in real estate. One of the ways to consider is to use a private investor. They can be anybody you know, from a friend, family member, or a coworker. A private investor simply needs to be someone with expendable income looking forward to invest.
An alternative is to use hard money lenders. These lenders operate like banks except that they do not consider things such as assets, credit score or income.They do charge percentages on top of the interest as well.
3. Real estate is always risky
In most times, property investment is associated with risk. At times markets depreciate and unexpected problems occur leading to negative profits.
However, there are ways to avoid the risk, or maybe minimize it significantly. You can get a property and put it under contract, then get someone to buy it. In return, you get a wholesaler’s payment for your effort.
In a usual house flip, you should enter deals with a backup plan to reduce the risk. If you are unable to fix and flip it, you can rent it out and cover your expenses. If you can do this, you will greatly reduce the risk.
4. it’s not the right time to buy
Regardless of how the current economy appears to be, there will always be pessimists to discourage you. This has never been less true especially when you want to buy and hold properties. Presently, people are renting than before. Property owners manage to fill properties quicker and charge more rent each month, leading to larger profit and more passive income every year. Do not be misled by this myth to stop you from investing.
5. You will get rich quick
Even first-time purchasers think they’ve what it takes to make big money in a snap. Sadly, real estate investing needs time, even with flipping. In fact, a hold strategy and a purchase, among the most profitable sorts of real estate investing, necessitate that you keep hold of your property for several years in order to make the most out of your profits.
6. You must be a landowner to collect passive income
Do you believe that you can’t collect passive income from real estate investing? That’s just a myth. With the assistance of a management team and a wholesale broker, you play part of the investor’s role, not the landowner. Even as your role will need a number of oversight and decision-making, it will never turn into a second job.
7. Most cheap assets are money pits in poor areas
You can get foreclosures in every area, and some possibly in good condition. Lenders and banks are willing to get rid of such homes, meaning that cheap assets aren’t automatically damaged goods. In reality, when working with wholesale brokers, finding good homes for cheaper prices is even simpler.
So, where would you be if your life is controlled around myths? This will not be helpful since you won’t be making logic decisions, the sort of decisions that will make you succeed. Do not allow misconceptions and myths to prevent you from making impressive big profits.