The 3 Easiest Ways to Make Money In Real Estate
by Bryan Wittenmyer
I once asked my handyman what was the easiest money he had ever made in his
life. His answer was that although he had been in many small businesses and had
done countless handyman/contracting jobs over the years, the easiest money he
made was in roofing. He explained how that roofing work is higher risk work that
many folks dislike and fear doing, therefore the mark-up is tremendous.
He especially likes smaller flat or semi-pitched roofs. For about $250 in
materials he could charge $1,000 for a roof which he could install in a day.
Larger, shingled roofs have even better mark-ups, although more time consuming.
I then began asking myself the same question. What was the easiest money I had
ever made in business or investing?
There are 3 ways or modes (versus tools and techniques) that came to my mind
quickly.
- By far the easiest money I have ever made was from real estate appreciation. I
have been fortunate to have been in the game long enough to ride two giant waves
of appreciation and inflation. The price runup that occurred in the mid to late
'80s, and the current bubble we have going now. Any dummy can make money in real
estate during strong seller's markets. It makes you feel smart, but the main
smart thing you really did to achieve it was to be smart enough to buy it.
- Next, buying discounted property through patient tracking and buying of
properties is the next easiest money I have made. Like when I bought a $20,000
house for $2,800. Nuts, but true. Or, like the $20,000 purchase with 100% owner
financing which was resold via lease option for $39,000.
Thoughtful and determined deal making is the second easiest way to make money in
real estate. The cliche is true - you make your money when you buy. One caveat:
Lower-income grade deals must be outrageously benefically-priced to be worth the
risk. Solid, middle-grade properties need not be "steals" to be good buys. A few
years ago, I bought 2 houses from my attorney at decent to fair prices, but they
were in excellent areas and have ALL brick exteriors with new roofs. They
weren't steals, but they have appreciated by $20,000 each since acquisition.
- Lastly. Rents. This takes time as I mention over and over, but once properties
become seasoned and rents rise and debt drop off - rents are easy money. The
problem - few have the future sight to maintain their hand in the game. It is a
wonderful business to learn. Most landlords don't work very hard.
- Rehabs and Interest Profits. Yes, these could be debated as easier than rents,
but without rents you can't get number 1 - Appreciation and Price Inflation from
governmental debt-driven inflation. And, you pay a lot more taxes, therefore
limiting your net worth growth.
Bio:
Bryan Wittenmyer has been investing in real estate for the past 15 years. He's
not the new kid on the block. In the past five years he has written extensively
in the real estate field. His articles have appeared in Creative Real Estate
Magazine and the Real Estate Entrepreneur. Bryan served on the board of
directors of the Real Estate Investment Association of Berk's County for 3
years.
Although Bryan hasn't attended formal university studies, he keeps himself
educated reading a plethora of books, newsletter, journals, and listening to
hundreds of audio tape lectures. He jokingly considers himself to be an
information junkie. You can also benefit from his years of practical business
experience, having managed several income stream businesses, ranging from
automobile debt instruments to appliance paper. He also has bought numerous real
estate debt instruments - he knows the income stream business.