account, your cashflow can grow tax-free until you retire.
mortgage notes are created from owner-financing situations. An owner of a paid-off property can finance it in total for the buyer for an income stream (monthly pay- ments). If they later need cash, they can sell the note, usually at a discount to the property’s value. The investor buys the note and contin- ues to receive the payments, and the best part, the buyer receives instant equity. TAX LIEN CERTIFICATES When home- owners fall behind on their property taxes, many jurisdictions will sell the debt to investors in the form of a tax lien certificate. It is a first-posi- tion lien on the property and the owner usually has a specified amount of time to pay the lien, return on a short-term investment. If the taxes are not paid on time, the investor can foreclose and take ownership. Though this sounds enticing, I’ve learned that not every municipality treats tax liens the same, so do your homework! There is a real estate investment strategy for almost anyone inter- ested in real estate. If you've been considering diversification of your investments, take a look at each of these strategies carefully and find the one that best fits your long-term financial goals. • penalties, and interest to the investor, who can make a nice
REAL ESTATE INVESTMENT TRUSTS (REITS) This passive real estate investment allows small amounts of your capital to buy shares in an REIT. There are two major REIT types, equity, and mortgage. The equity REIT actually buys properties and profits from their rental income, while the mortgage REIT invests in the mortgages on these proper- ties. REITs trade on the open market, offering that advantage over mutual funds, as well as lower management fees in many cases. WHOLESALING AND FIX & FLIP These are solely short-term profit strate- gies. Wholesaling allows an investor to find properties they can flip to another investor for a profit. It’s fast and often results in deals done in just a few days to a few weeks. Fix-and-Flip can be a bit more difficult now depending on your area, but this strategy adds the process of fixing up or renovat- ing a home, usually providing higher profits through the rehab activity. I think both are fine strategies for short-term profits, but it’s just not my cup of tea. BUYING REAL ESTATE NOTES Some investors prefer buying notes, both performing and non-perform- ing. Performing notes are those on which borrowers are keeping current with their mortgage pay- ments. Non-performing notes can be at various stages from a couple of months late to full default. These can result in foreclosure to gain ownership of the property far below market value, which could be a win for most investors. Often, first
High-Quality Investing Methods FINDING YOUR RIGHT WAY TO MAKE MONEY IN REAL ESTATE.
look at some other ways to turn a profit from real estate:
RESIDENTIAL RENTAL REAL ESTATE Owning residential single-family, duplex homes, or condominiums is funding a great many retire- ments. You can profit over the long-term through value apprecia- tion, but you also can bank cashflow each month from rents over expens- es if you have the right operations and property management in place. This is exactly how many great investors got started on their path, as it can be less risky than the stock market and provide better cashflow. If you do it in the right retirement
by Vanessa Engineer, M.D.
Vanessa Engineer, MD is an author and new real estate investor. She and her husband, Abhi Golhar (investor and host of the Think Realty Podcast), offer
certainly one strategy my husband, Abhi Golhar, and I will continue to use to build our wealth. I’ve learned for most real estate investors, investing in real estate rentals as a diversification strategy for retirement accounts is gaining
enjoy watching the fix-and- flip shows on TV just as much
popularity, and the cashflow from owning rentals is the foundation for many comfortable retirements. I’m on my journey of discovering the best ways to make money with real estate. As you might be discovering your best REI way, here is a quick
a look into their journey of investing to help inspire people to do more with the money they earn. Read their book to find out how you can create a plan that works for you, your family, and your future. Learn more and continue the conversation at www.healthypassiveincome.com.
as the next person and many new investors think that this is the way you make money in real estate. But let’s not forget investing in rental property! I’ve come to find this is
24 | think realty housing news report :: august / september 2019
thinkrealty . com / hnr | 25
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