Real Estate Investment Success Series Tip #6 –The Real Estate Investment Game Plan

Authored By: Joel Teo

This article is part of the Real Estate Investment Success Series and continues from http://www.realestateinvestment101.info/real_estate_agent_secrets.html

Have you heard of those people who are landlords of a few properties and remain that way all their lives? Now contrast this to savvy real estate investors that use the power of leverage to vastly increase their cash flow. This article strives to highlight one game plan advocated by many real estate gurus to financial wealth.

Firstly, you would want to find a Property that generates a positive cash flow after instalment payments. Thus, successful real estate investors will spend many hours hunting for the property that generates a good cash flow from the rental proceeds after deducting the monthly instalments due to the mortgage. Remember to take into account the trend of rentals as if you purchase a property when the rentals are on the high side, your calculations may fail you when there is a drop in the rentals and you will be forced to sell your real estate investment.

Secondly, once your property has been partly paid up, refinance and free up money to get more property and establish more cash flow. This is critical so that you get multiple streams of cash flowing into your bank account by virtue of the difference between the rental and the interest instalment payments. However, always remember to keep a sizeable cash reserve in case there is a downturn in the economy and you may find it difficult to get tenants to cover your interest instalment payments for your real estate investment.

Thirdly, once the amount of property that you own increases, exchange your several properties for larger commercial property. Many hotel owners started out in this way and along the way made more and more acquisitions and let hotel management companies run the hotels. Once you reach this stage, your real estate investments would have reached a good size and you would have made your money.

Step Four: Repeat the above process

In conclusion, making money with real estate investing requires a good well through out strategy and game plan. Spending time dwelling on the big picture when you are in the middle of a real estate deal will help you get a sense of perspective so that you do not get lost in the deal to forget the reason why you are involved in it in the first place.

Note this is only one method that you can use to make money with real estate investing other profitable strategies include doing up and flipping and no money down strategies. The key is to find one that makes the most sense to you and one that you think that you can use and apply on a consistent basis.

Joel Teo is the owner of several websites and takes a keen interest in real estate investment. Learn more about real estate investing in our Real Estate Investment Success Series today.

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