Real Estate Investing 101

No cash reserves – It’s all about the money so don’t ever forget that. True, you don’t necessarily need to use your own money but you will definitely need cash to make deals happen. Even if you only plan on flipping houses, you’ll need cash reserves for certain contingencies that will come up.

So how does watching “Young and the Restless” relate to investing? Well, like gambling, investing can be a very emotional roller-coaster ride. There will be ups and downs and when you have your life savings is on a ride like that you tend to get nervous. This is very common as a beginner and even later as an experienced investor, but you need to stay focused on the end result. When I invest, I research, plan, estimate, predict, compare, confirm, reconfirm and then buy. Once your confident of which direction a market will go, the only question left to answer is when will it get there? Unfortunately, that is one question investors really can’t answer. Based on past projections, you could estimate a probable range in which that investment will reach your target goal but it’s never 100% accurate.

Investors sometimes never choose to take possession of the underlying stock. All they do is trade options and make profits. To do this correctly, it’s important to realize that option contract will look less alluring as time passes by toward expiration. The amount of time remaining affects the price. Likewise, the selling price of the option is impacted by the underlying stock price.

What these hucksters fail to deliver is a lasting strategy. No matter how eloquently you talk about winning stocks, once you deconstruct the advice several common elements emerge. These are basics of investing 101, and what everyone who plays the stock market game needs to know.

Stage the property. A vacant house makes it harder for buyers to mentally move in. A few rooms that are well staged will really increase the value in the minds of buyers, so it is generally well worth the cost. This is especially true for higher end homes, but may be the thing that tips the balance for ANY property.

Investors are compensated for the systematic risk that comes with investing in the stock market over a long period of time. They are not compensated for the extra risk associated with individual securities. If you’re not compensated for the additional risk – why would you subject your portfolio to it?

Making sure you use legal forms is another important step when it comes to buying investment property. The first thing you want to do as an investor is to sign a sales contract or contract for deed, just be sure to put a clause in saying “contingent upon buyers approval of inspection.” There are a few ways home buyers can get these forms. A great way is to find legal online forms. You can sometimes find forms in a kit, that would contain a quit claim deed, contract for deed, sales contract, and every other form that an investor would need.