Subject: How to make money?
Question
Hello I have been dealing with investment properties for almost a
year now. My first property that I bought was a two family property
in the city of Fall River Massachusetts. Now I purchased this
property for 185,000 and then put 37,000 into it to fix it up
(including mortgage payments). I later sold the property for
265,000. Now after paying closing costs and Realtors, and moving
costs and everything else I really did not do so well. After that I
purchased a three family home for 230,000. Now I have put 100,000
into this property including all mortgage payments closing costs
fixing it up everything. (Also keep in mind that I live or lived in
each house that I have bought.) Recently the house was just
appraised for 390,000. Meaning there is 60,000 in equity in the
home. My question is how can I make some real money with real
estate? Because from what I am doing I'm not really making that
much money. I only make about thirty grand a year at my regular
job. How can I take my sixty grand in equity and turn it into
something? Thank you for your response in advance.
Answer
Michael,
Thank you for your question! Yes, I agree that real estate can take alot of
work for the returns. However, your returns are actually quite good. In your
second example, you will make about a 25% profit after all expenses in a year.
This is very, very good. There is unfortunately no reliable way to make money
faster than this. The way that investors become wealthy in either the stock
market or in real estate, is by doing it over and over again for many years. If
you continue to be profitable on your properties, you should be able to work on
more properties at the same time. For example, next time buy two houses, and if
you make 25% or more in profit in a year on both, then do it with four houses at
the same time. As your operation grows, you could hire an assitant to handle
much of the paperwork and organization for you, freeing yourself up for more
important tasks and allowing you to work with even more properties. No one gets
rich off a single real estate investment, unless it is commercial property or
entire buildings. Even then the profit margin is similar, but since you are
working with much higher value the profit is greater. |
|
