Vinny The Bird is popular for solving problems in the bird community. Image by Jan Tik

If you’re new to this real estate investing series I’m writing, the purpose of it is to show you as an entrepreneur that learning your trade well and opening your mind to endless possibilities can help you achieve your goals.

I have a passion for creativity in business and I love investigating intuitive ways to invest in real estate.

When investing, I typically buy and sell differently than most Realtors suggest or know about. I listen to everyone, but ultimately I’m the investor, I’m the entrepreneur, and I make the decisions.

Today I want to show you how by thinking creatively and solving your customer’s needs you can create a win-win situation and ultimately get what you want (in this example the customer will be the seller of a house I want to buy). It just takes a little creative thought.

Image by thinkpanama

John sits in his cushioned chair, takes a sip of his steaming coffee, and tells himself “I will try to keep an open mind and see the logic to Justin Ewers of U.S.News latest blog article reprinted in the Yahoo! Real Estate section.”

In case you don’t click over to read the article, Justin’s post suggests to us that renting a house and investing your monthly savings may be a better investment than investing in owning your own home.

This sparked a challenge in my head. Which investment is truly better?

I have broken Justin’s article down to 3 main quotes from his article that I will comment on in regards to this idea.

The Challenge

Ok, so you’re not a trained real estate investor and you want to know if there’s any truth to Justin’s article showing how renting can be a better investment than owning.

Do you think this house would sell quickly?

If you’re a normal homebuyer, the statement I’m about to make may shock you.

Price is of little importance when it comes to making a profit in real estate.

“Oh no he didn’t,” I’m sure you’re saying right about now.

Understand this, price is just a number. Price is not the deciding factor on whether you’re going to make a profit in real estate investing or not. Price is something every day homebuyers worry about. For them, it’s about spending the least amount of money, usually looking at monthly payments, and hoping to close the deal with a little equity under their belt.

For a seasoned investor, their only concern is making a profit - that’s it, plain and simple. It doesn’t matter if you spend more or less money as long as the endgame results in an increase of net worth.

Know your options! Image by thinkpanama

Real estate investors have a saying: “You make your money when you buy.”

If that’s true, you better know which options you have to buy under.

Buying a property using the correct method for your needs can reduce the amount of risk involved.

This is an important idea to remember that most people, not even Realtors, ever fully realize.

Buying under good terms often times outweigh buying at a reduced price.

That will probably be my opening line when it comes time to write that post.

In general, the greater the risk, the better your reward should be. But this doesn’t always have to be the case if you buy correctly.

Example How Buying Real Estate Correctly Reduces Risk

Let’s say you want to flip a property. You buy the house for $200,000 with terms of the seller will pay half your closing costs and you obtained 100% financing - so you don’t have to put any money down.

First - know what not to buy! Image by superciliousness

Real estate investors use many methods to finding investment properties.

They network with lawyers, bankers, accountants, subscribe to legal publications, and so on to discover investment properties and possible motivated (flexible) sellers.

As a normal homebuyer though, you probably won’t contact lawyers and accountants or subscribe to legal forms to investigate who’s going through a divorce or getting ready to file for bankruptcy.

Let’s then take a look at a few practices and insights investors use to locate a property that typical homebuyers can learn from and use.

What You Should Avoid

Ever see the show, What Not To Wear?

In short, the two hosts are fashion experts who find people who dress out of style and give them a wardrobe makeover that will turn heads and make a person feel in style.

Image by Wikipedia

This blog is about entrepreneurship (and succeeding online). I believe ethical and trained real estate investors are great examples of creative entrepreneurs and understanding their mindset will help us all learn to be savvy business-minded individuals.

Realtors Are Salespeople

Realtors are not created equal and if you’re planning to use one to find your next house, take a moment and consider the following.

When choosing a Realtor to assist you in finding a home, never lose site of the fact that a Realtor is a salesperson.

Salesmen or salesperson are terms that make buyers nervous and are terms sellers love.

So if you’re a buyer and your Realtor is a salesperson, what is your Realtor selling?

They’re selling a house, just you are not the seller, you’re the buyer. True your Realtor’s commission is paid for by the seller, but keep in mind the higher price you pay for that house, the more money your Realtor assisting you in finding a home will make.

They say you make your money in real estate when you buy. Nothing could be more true.

Making money in real estate isn’t only measured in how much money you make, it’s also measured in how much money you keep.

When buying my last bank-owned property, I managed to get all my closing costs covered plus 2 points paid toward my loan; that came out to just under $9,000 I kept in my pocket!

For more information on what closing costs are, click here.

In today’s market, getting your buyer’s closing costs paid for you shouldn’t be too much of a problem unless you’re buying a short sale. Don’t worry though, I’ll show you how to deal with those short sale closing costs, too.

Methods Of Covering Your Closing Costs

*Note: Buyer’s closing costs typically hover around 3% of the total purchase price of the property. Furthermore, many lenders won’t let the seller contribute more than 3% for you - but that’s not set in stone.