Reinventing Real Estate, Part 1: Online and Empowered Consumers Are Taking Charge and Paying Less

For decades, the real estate world turned in a predictable manner. The roles of buyers, sellers and real estate professionals were fairly well defined and transactions followed a predictable path of yard signs, newspaper ads, open houses and miles of paperwork.

Recently, online and empowered consumers have changed the game. Real estate professionals now face issues similar to the ones that have transformed the retail, personal finance and travel planning industries. As technology advances and new business models evolve, the real estate industry has begun to transform itself from providing traditional, carefully controlled "agent-centric" transactions to new "consumer-centric" practices. The following is a look at some of the recent industry trends and how buyers, sellers and investors can expect to benefit. The "Five Ds" that are driving change in real estate are:

1. Disruption - Over the past 10 years, the Internet has matured into a powerful platform for delivering real estate information, forever changing the interaction between buyers, sellers and real estate professionals.

2. Displacement - The popularity and acceptance of self-service and consumer-direct business models is being felt by real estate professionals, who are striving to develop attractive new offerings for Web-savvy consumers.

3. Demanding consumers - You now have more real estate knowledge, tools and resources at your fingertips than ever before. More savvy consumers tend to be more independent and demanding.

4. Downward pressure - Traditional real estate commissions of 5-6 percent of a property's sales price are facing downward pressure.

5. Developing alternatives - The real estate industry is transforming itself to provide targeted services and exciting new options that add value for consumers.
Disruption

"We are going to see our industry go through dramatic transformation via the Internet and consolidation of agents and companies." - eRealty Times Columnist Dirk Zeller

Some industry observers have adopted Harvard Business School professor Clayton Christensen's term "disruptive technology" to explain recent developments in real estate. Though it's easy to point to the World Wide Web and advancing technology as the main changes in real estate, that's only part of what's shaking things up. Essentially, the real cause of disruption is not just technology, but technology-enabled real estate consumers.

Web-enabled consumers

According to the National Association of Realtors (NAR), more than 72 percent of homebuyers now begin their home search online. The popularity of online real estate ads surpassed newspaper property listings back in 2001, and the gap is widening. Less than one percent of buyers first learned about the home they purchased on the Internet in 1995, while in 2004, that number passed 20 percent.

According to a California Association of Realtors (CAR) survey, 97 percent of respondents said the Web helped them understand the buying process better and 100 percent said using the Web helped them understand home values better. Web-enabled homebuyers like you are taking a more active role in researching homes and neighborhoods. You also now spend less time with real estate professionals once you have completed your research. Internet homebuyers also used the Web effectively to filter out properties that did not interest them, visiting 6.1 homes on average versus 15.4 for traditional buyers.

Today, you can view photos and detailed information for hundreds of properties in the time it used to take to visit a single one. And the Web provides much more opportunity than simply moving print listings online. The growing availability of residential high-speed Internet connections has boosted the popularity of virtual tours and interactive maps, providing consumers with powerful and flexible visual search tools.

In addition to making home searches easier, automated valuation model (AVM) software is making a big impact in how properties are evaluated. AVMs, which generate valuation estimates by analyzing and comparing property information data, are becoming increasingly sophisticated and accurate. While not considered a substitute for human appraisals, AVMs are gaining popularity because they are inexpensive, easy to use and produce valuation estimates in minutes. Now AVMs, used extensively in electronic mortgage approval processing during the recent refinancing boom, are becoming available on real-estate Websites aimed at consumers. This is a significant development for independent sellers, who often find it challenging to price their properties correctly when selling on their own.

The MLS goes public

"In real estate, MLS data sits at the apex of the change, specifically the MLS information that is pushed to the Internet every minute of the day." - Bradley Inman, Publisher of Inman News

Once an exclusive tool for real estate professionals, the multiple listing service (MLS) has in recent years become a very public platform for real estate listings. The MLS is the nation's most comprehensive database of properties for sale - four out of five homes sold in the United States are listed on the MLS.
MLS properties are available to agents and brokers worldwide, and are now accessible via consumer Web sites such as Realtor.com, WSJ.com, Excite, Netscape, AOL and MSN. MLS listings also appear on local, regional and national brokerage Websites through Internet Data Exchange (IDX) agreements that allow participating Realtors to share listings and display them to consumers. Even though only licensed realtors can list property on the MLS, the system has begun to figure prominently for the $110 billion independent seller (for-sale-by-owner or FSBO) market. About 13 percent of real estate sales are now FSBO, conducted without a broker's assistance.

Type "flat fee MLS" into any major search engine, and you'll see dozens of real estate professionals willing to list your property in the MLS for a fee. If you are willing to pay a commission of 2-3 percent, you can attract the attention of thousands of agents who will show your property to prospective buyers. You can then reduce the cost of the sale to about half a traditional 5-6 percent sales commission, plus the cost of the MLS listing. If you find an independent buyer working without an agent, you could make a sale with no commission at all and pay only an MLS listing flat fee.
Displacement

Currently, about 2.4 million real estate licensees operate nationally, according to the Association of Real Estate License Law officials. The NAR has more than one million members, up from about 760,000 members five years ago. Many real estate professionals and industry observers expect a significant decline in this number because some tasks traditionally performed by agents and brokers can now be done more quickly and easily by Web-enabled consumers.

"Historically the fundamental driver of the real estate industry was the control of information. The real estate agent and the real estate office were the only sources of comprehensive information on which properties were for sale and those who might be interested in buying them. With this control revenues were practically guaranteed.

Moreover, because this exclusive control was akin to a monopoly by virtue of the multiple listing service (MLS) any firm of any size could serve the customer equally well. As a result, the number of real estate companies grew without regard to market efficiencies.

Simply put, the traditional model is too inflexible. Consumers are seriously questioning the value of a real estate agent. They frequently feel that many of the traditional tasks undertaken by the agents are now either no longer required or can be done by the consumer themselves."

- Swanepoel & Tuccillo, Real Estate Confronts Profitability

The quotes above, from a popular report on emerging real estate business models and dwindling profit margins, highlight a number of issues traditional real estate professionals are now facing. And if the real estate industry has grown historically without regard to market efficiencies, the issue has only been compounded since 2001, as new agents signed on in droves, lured by low interest rates and skyrocketing home prices in many areas. It's likely that the number of traditional real estate agents will decline, while new types of real estate jobs will be created to deliver value to Web-savvy customers.

NEXT in Part 2 of 2: - Demanding Consumers, Downward Pressure and Developing Alternatives

California Real Estate Agents

Consumer purchase power has increased despite inflation. Easy and hassle-free mortgage plans have helped numerous people pay for their own property rather than opt for rented property. This progressive consumer pattern has been a boon for the real estate trade. Services of real estate agents in California could be advantageous to clients when considering the purchase, sale, rental, or lease of a property.

Real estate agents are qualified specialists who are well versed with real estate trading. Agents have in depth knowledge regarding the property they deal with and are well versed with legalities involved in California real estate deals. Real estate agents may be able to satisfy customer queries related to property costs, appraisal, and motive of sale. They are well informed about property sizes, maintenance costs, and legal restrictions.

In order to select an appropriate California real estate agent, clients may approach any of the real estate firms or private brokers in the locality or online. Agents and clients may be able to discuss specific requirements, budgets, and other legalities at meetings or online. California real estate agents can provide information in relation to mortgage types for outright purchases. They may also recommend names of banks and financial institutions that may provide funds upon the presentation of their credentials.

California real estate agents work through a widespread system and may deal in property all over California or in a certain area within a particular city. They act as mediators for buyers, sellers, and rental agencies. Very often, clients do not meet until a property deal is settled upon. Real estate agents are often authorized to negotiate a deal if one party lives outside California. Real estate dealers prefer to hire agents as it helps in increasing the volume of sale. A number of California real estate businesses hire agents as salaried staff. Agents also receive additional payments for deals closed by them. These commissions are paid from service charges paid by clients.

Real Estate Agents and the Internet - How to Buy and Sell Real Estate Today

Then and Now

Ten years ago, a search for real estate would have started in the office of a local real estate agent or by just driving around town. At the agent's office, you would spend an afternoon flipping through pages of active property listings from the local Multiple Listing Service (MLS). After choosing properties of interest, you would spend many weeks touring each property until you found the right one. Finding market data to enable you to assess the asking price would take more time and a lot more driving, and you still might not be able to find all of the information you needed to get really comfortable with a fair market value.

Today, most property searches start on the Internet. A quick keyword search on Google by location will likely get you thousands of results. If you spot a property of interest on a real estate web site, you can typically view photos online and maybe even take a virtual tour. You can then check other Web sites, such as the local county assessor, to get an idea of the property's value, see what the current owner paid for the property, check the real estate taxes, get census data, school information, and even check out what shops are within walking distance-all without leaving your house!

While the resources on the Internet are convenient and helpful, using them properly can be a challenge because of the volume of information and the difficulty in verifying its accuracy. At the time of writing, a search of "Denver real estate" returned 2,670,000 Web sites. Even a neighborhood specific search for real estate can easily return thousands of Web sites. With so many resources online how does an investor effectively use them without getting bogged down or winding up with incomplete or bad information? Believe it or not, understanding how the business of real estate works offline makes it easier to understand online real estate information and strategies.

The Business of Real Estate

Real estate is typically bought and sold either through a licensed real estate agent or directly by the owner. The vast majority is bought and sold through real estate brokers. (We use "agent" and "broker" to refer to the same professional.) This is due to their real estate knowledge and experience and, at least historically, their exclusive access to a database of active properties for sale. Access to this database of property listings provided the most efficient way to search for properties.

The MLS (and CIE)

The database of residential, land, and smaller income producing properties (including some commercial properties) is commonly referred to as a multiple listing service (MLS). In most cases, only properties listed by member real estate agents can be added to an MLS. The primary purpose of an MLS is to enable the member real estate agents to make offers of compensation to other member agents if they find a buyer for a property.

This purposes did not include enabling the direct publishing of the MLS information to the public; times change. Today, most MLS information is directly accessible to the public over the Internet in many different forms.

Commercial property listings are also displayed online but aggregated commercial property information is more elusive. Larger MLSs often operate a commercial information exchange (CIE). A CIE is similar to an MLS but the agents adding the listings to the database are not required to offer any specific type of compensation to the other members. Compensation is negotiated outside the CIE.

In most cases, for-sale-by-owner properties cannot be directly added to an MLS and CIE, which are typically maintained by REALTOR associations. The lack of a managed centralized database can make these properties more difficult to locate. Traditionally, these properties are found by driving around or looking for ads in the local newspaper's real estate listings. A more efficient way to locate for-sale-by-owner properties is to search for a for-sale-by-owner Web site in the geographic area.

What is a REALTOR? Sometimes the terms real estate agent and REALTOR are used interchangeably; however, they are not the same. A REALTOR is a licensed real estate agent who is also a member of the NATIONAL ASSOCIATION OF REALTORS. REALTORS are required to comply with a strict code of ethics and conduct.

MLS and CIE property listing information was historically only available in hard copy, and as we mentioned, only directly available to real estate agents members of an MLS or CIE. About ten years ago, this valuable property information started to trickle out to the Internet. This trickle is now a flood!

One reason is that most of the 1 million or so REALTORS have Web sites, and most of those Web sites have varying amounts of the local MLS or CIE property information displayed on them. Another reason is that there are many non-real estate agent Web sites that also offer real estate information, including, for-sale-by-owner sites, foreclosure sites, regional and international listing sites, County assessor sites, and valuation and market information sites. The flood of real estate information to the Internet definitely makes the information more accessible but also more confusing and subject to misunderstanding and misuse.

Real Estate Agents

Despite the flood of real estate information on the Internet, most properties are still sold directly through real estate agents listing properties in the local MLS or CIE. However, those property listings do not stay local anymore. By its nature, the Internet is a global marketplace and local MLS and CIE listings are normally disseminated for display on many different Web sites. For example, many go to the NATIONAL ASSOCIATION OF REALTORS Web site, http://www.realtor.com, and to the local real estate agent's Web site. In addition, the listing may be displayed on the Web site of a local newspaper. In essence, the Internet is just another form of marketing offered by today's real estate agent, but it has a much broader reach than the old print advertising.

In addition to Internet marketing, listing agents may also help the seller establish a price, hold open houses, keep the seller informed of interested buyers and offers, negotiate the contract and help with closing. When an agent provides all of these services it is referred to as being a full service listing arrangement. While full service listing arrangements are the most common type of listing arrangement, they are not the only option anymore.

Changes in the technology behind the real estate business have caused many agents to change the way they do business. In large part, this is due to the instant access most consumers now have to property listings and other real estate information. In addition, the Internet and other technologies have automated much of the marketing and initial searching process for real estate. For example, consumers can view properties online and make inquires via email. Brokers can use automated programs to send listings to consumers that match their property criteria. So, some agents now limit the services they offer and change their fees accordingly. An agent may offer to advertise the property in the MLS but only provide limited additional services. In the future, some real estate agents may offer services in more of an ala carte fashion.

Because of the volume of real estate information on the Internet, when people hire a real estate agent today they should look at the particular services offered by the agent and the depth of their experience and knowledge in the relevant property sector. It is no longer just about access to property listing information. Buyers and sellers historically found agents by referrals from friends and family. The Internet now provides ways to directly find qualified agents or to research the biography of an agent referred to you offline. One such site, AgentWorld.com, is quickly becoming the LinkedIn or Facebook for real estate agents. On this site an agent can personalize their profile, start a blog, post photos and videos and even create a link to their web site for free. Once unique content is added to their profile page the search engines notice!

Some have argued that the Internet makes REALTORS and the MLS less relevant. We believe this will be false in the long run. It may change the role of the agent but will make knowledgeable, qualified, and professional REALTORS more relevant than ever. In fact, the number of real estate agents has risen significantly in recent years. No wonder, the Internet has made local real estate a global business. Besides, Internet or not, the simple fact remains that the purchase of real property is the largest single purchase most people make in their life (or, for many investors, the largest multiple purchases over a lifetime) and they want expert help. As for the MLS, it remains the most reliable source of real estate listing and sold information available and continues to enable efficient marketing of properties. So, what is the function of all the online real estate information?

Online real estate information is a great research tool for buyers and sellers and a marketing tool for sellers. When used properly, buyers can save time by quickly researching properties and, ultimately, make better investment decisions. Sellers can efficiently research the market and make informed decisions about hiring an agent and marketing their properties online. The next step is to know where to look online for some of the best resources.
Internet Strategies

In the sections that follow, we provide strategies and tips on how to use the Internet to locate properties for sale and research information relevant to your decision to purchase the property. There are many real estate Web sites from which to choose and although we do not mean to endorse any particular Web site, we have found the ones listed here to be good resources in most cases or to be so popular that they need mention. One way to test a Web site's accuracy is to search for information about a property you already own.

Finding Real Estate for Sale

Despite the widely available access to real estate listings, many believe that MLS databases continue to offer the most complete and accurate source of real estate information. Most MLSs now distribute content to other Web sites (primarily operated by real estate agents). An excellent starting point for MLS originated content is the national NAR Web site, realtor.com, which is also the most popular web site for searching real estate listings. Virtually all local and regional MLSs have an agreement with realtor.com to display much of their active listing inventory.

Some local and regional MLS systems also have a publicly accessible Web site. However, to get complete information you will most likely still need to find a qualified local REALTOR. Many local real estate agents will also provide their customers (via email) new listings that are input into the MLS that match their predefined criteria. This can be very helpful to a busy buyer.

There are also many Web sites that display both real estate agent listed and for-sale-by-owner properties. Some of the more popular Web sites include zillow.com and trulia.com. These sites offer other services too. For example, zillow.com is best known for its instantaneous property valuation function and trulia.com for providing historical information. Another source of properties for sale is the state, regional, and local Web sites associated with brokerage companies; for example, remax.com or prudential.com. Search engines like yahoo.com and classified advertising sites like craigslist.com also have a large number of active real estate listings.

One key difference between these sites is how much information you can access anonymously. For example, at trulia.com you can shop anonymously up to a point but then you will need to click through to the agent's Web site for more information. Many new real estate search engines allow you to sift through listings without having to fill out a form. The best strategy is to browse a few of the sites listed above to find geographic areas or price ranges that are interesting. Once you get serious about a property, then that is the time to find a qualified REALTOR of your choice to conduct a complete search in the local MLS.

It also never hurts to search the old-fashioned way by driving through the neighborhoods that interest you. There is no substitute for physically, not virtually, walking the block when you are making a serious investment decision. In this sense, real estate is still a very local business and standing in front of the property can lead to a much different decision than viewing a Web page printout.

Valuing Real Estate

As we mentioned, one of the most popular real estate tools is zillow.com's instant property valuation. Just type in an address and in and you get a property value. It even charts the price ups and downs, and shows the last date sold (including price) and the property taxes. There are other sites that provide similar tools such as housevalues.com and homegain.com. Unfortunately, many people use these estimated values alone to justify sales prices, offers and counteroffers. However, these are only rough estimates based on a formula that incorporates the local county sales information. These estimates can swing wildly over a short period of time and do not appear to always track actual market changes, which are normally more gradual. In addition, these estimates do not automatically take into account property remodels or renovations or other property specific or local changes. This is not to say these sites are not useful. In fact, they are great starting points and can provide a good ball-park value in many cases.

When it comes to getting a more accurate value for a particular property, there are other strategies that are more trustworthy. One is to go directly to your county's Web site. More often than not the county assessor's area of the Web site provides sales and tax information for all properties in the county. If you want to research a particular property or compare sales prices of comparable properties, the local assessor's sites are really helpful. When you visit a county's Web site you are getting information straight from the source. Most counties today publish property information on their Web sites. Many times you cannot only see the price a previous owner paid, but the assessed value, property taxes, and maps. Some county assessors are now adding a market and property valuation tools too.

Given the importance of valuation to investing, we are also going to remind you of the two most important (non-Internet) valuation methods: real estate agents and appraisers. Working with a local REALTOR is an accurate and efficient way to get value information for a property. While one of the primary purposes of the MLS is to market the active property listings of its members, the system also collects sales information for those listings. REALTOR members can pull this sales information and produce comparable market analyses (sometimes called CMAs) that provide an excellent snapshot of a particular property's value for the market in a particular area.

Finally, the most accurate way to value a property is by having a certified appraiser produce an appraisal. An appraiser will typically review both the sold information in the MLS system as well as county information and then analyze the information to produce a valuation for the property based on one or more approved methods of valuation. These methods of valuation can include a comparison of similar properties adjusted for differences between the properties, determine the cost to replace the property, or, with an income producing property, determine a value based on the income generated from the property.

The Neighborhood

There are many ways the Internet can help you get the scoop on a particular neighborhood. For example, census data can be found at census.gov. You can also check out the neighborhood scoop at sites like outside.in or review local blogs. A blog is a Web site where people discuss topics by posting and responding to messages. Start by looking at placeblogger.com and kcnn.org/citymediasites.com for a directory of blogs. Trulia.com has a "Heat Map" that shows how hot or cold each neighborhood is based on prices, sales, or popularity among the sites users.

Schools

When it comes to selling residential property or rental properties that cater to families, the quality of the area school district makes a huge difference. There are many Web sites devoted to school information. Check out greatschools.net or schoolmatters.com. Most local school districts also have their own Web site. These sites contain a variety of information about the public schools and the school district, including its district demographics, test scores, and parent reviews.

Finding the Right Real Estate Agent

A recent addition to the Internet boom in real estate information is Web sites that let real estate agents market their expertise and local knowledge by displaying their professional profiles and socially networking with blogs. You can search to find an agent with a particular expertise, geographic area of specialization, or an agent offering specific services. The web site AgentWorld.com lets users quickly and easily find an agent with the right expertise using keyword searches and clean and simple agent profiles. AgentWorld.com also enables agents to post personalized blogs, photos and videos to help consumers find the best agent for their needs. Plus, many agent profiles include a direct link to the agent's web site where you will likely find the local MLS listings.

Maps and Other Tools

The Internet has made mapping and locating properties much easier. To get an aerial view or satellite image of a property or neighborhood, go to maps.live.com or maps.google.com or visit walkscore.com to see how walk-able a particular property is. These sites can give you an idea of the neighborhood characteristics and the types of entertainment, restaurants, and other facilities that are within walking distance of the property. Maps.Live.com provides a view at an angle so you can see the sides of houses and Maps.Google even gives you a 360 degree street-level view for certain neighborhoods. If you have not tried one of these satellite map Web sites, you really should if only for amusement.

Final Thoughts on Internet Strategies

The Internet is a very effective research and marketing tool for real estate investors but is not a replacement for a knowledgeable experienced real estate professional. The Internet can save you time and money by enabling quick and easy property research and marketing options. Sites like AgentWorld.com also help you efficiently find a REALTOR who fits your buying or selling needs.

Always remember, when it comes to Internet strategies for real estate: More knowledge is better. You need to use the Internet to build your knowledge base on a target property or to find a real estate agent with expertise you need. However, the big caution here is that the Internet should not replace human judgment and perspective, expert advice or physical due diligence-keys to successful investing.

How to Select a Real Estate Agent

The purchase of a home, for the vast majority of individuals, is the single biggest financial decision made in their lives. Clearly, then, it becomes evident that the selection of a real estate agent is a serious consideration which should not be taken lightly. But what factors should be considered in the selection of a real estate agent?

Reputation

Not all real estate agents are the same. Some real estate agents have a reputation for being difficult to work with. For example, an agent that is pushy, argumentative, unprofessional, is late for appointments, or misses deadlines can frustrate the buying process. A real estate agent should have a reputation for getting along well with all parties to a transaction, buyers and sellers included. An agent that takes a lawyer-like approach of zealous advocacy for one side in a real estate transaction cause the other side to walk away from the deal. Communication and "people" skills are important, as well as diplomacy and tact in the event a difficult situation should arise. And clearly, honesty is tantamount.

Communication skills involve more than just communicating information - in fact, the primary test of effective communication skills is the ability to listen. An agent should listen to your needs, consider them, and then use that information to guide you to the neighborhood and home that is perfect for you.

Ascertaing the reputation of a real estate agent requires some detective work. It is wise to ask for references, on both sides of the transaction. Ask about problems that occurred during the process, and how they were handled. Talking to both buyers and sellers about their experience in dealing with a particular agent can provide insight as to how you can expect your real estate experience to unfold.

Geographical Area of Expertise

It is important as well to ensure you are dealing with a real estate agent who is a "local specialist". Many states technically allow licensed real estate agents to participate in real estate transactions anywhere within the state. However, a local specialist will be familiar with local selling practices. For instance, property transfer taxes vary by locale, as do the party responsible for paying them. In some locations, there may be different customs for the division of city and county property transfer taxes. You want to be sure that you are dealing with an agent familiar in local custom so as to avoid paying unnecessary fees.

One idea is to canvass the neighborhoods in which you are considering buying. If you see lots of yard signs for a particular agent in those neighborhoods, it is a good bet that the agent is a local specialist.

A local specialist will also be able to provide you information on schools, recreation, churches and synagogues, shopping and entertainment options in the area.

How to Select a Real Estate Agent

Word of mouth is usually the best and most reliable source of information regarding any particular real estate agent. This type of information is reliable in that it has not been "spun" by the agent and the source of the information has no particular motivation one way or the other, except to relate his or her experiences.

Be sure to interview more than one agent. Prior to conducting an agent interview, make a list of items that are important to you. These items might include proximity to freeways or commuter rail lines, style of home, age of home, proximity to schools, local tax rates, or any other number of items which may or may not be "deal breakers" in your mind. Additionally, you may be interested to find out whether or not the real estate agent has support staff which will assist in the handling of various aspects of transactions. Additionally, making a list of these priorities will assist your agent in finding the perfect home for your family.

Ask the real estate agent you are considering for referrals to other real estate agents for you to interview. An agent that is secure in his or her quality of service and reputation will have no hesitation to provide you with the names of competing agents for you to consider. An agent that provides this information to you is likely an agent with whom you would want to do business.

Other factors to consider are whether or not real estate is the agent's full time career, the number of years of experience the real estate agent has, and any real estate designations possessed by the agent.

About the Author:

Catherine Nguyen was born and raised in Dallas, Texas and is a licensed real estate agent. Ms. Nguyen specializes in Dallas real estate and has a career with Renowned Realty Group - Dallas/Ft. Worth RE/MAX.

Real Estate Software

Earlier, the purchase of real estate was looked upon as acquiring property for residential or commercial use. However, over the years this theory has changed. Today, the real estate market is a booming and profitable industry. It deals with the purchase, sale and lease of property in a much broader context. For an individual, this involves looking for a real estate agent who can help find an appropriate property and a bank that can fund the purchase. For a real estate agent, listing and updating information is difficult if done manually. Therefore, real estate software is used to make the entire process easier.

Real estate software provides automatic updates and reminders. Routine listings allow an agent to maintain accurate reports on all deals. This software helps maintain property lenders' and mortgage brokers' listings. An agent can successfully update changes on available real estate. Properties are categorized according to size and affordability.

Various types of real estate software cater to real estate marketing, sales and follow-up. Real estate software also incorporates presentation applications that allow real estate agents to match properties according to potential customer needs.

Some real estate software offers a complete office and administrative package that simplifies real estate management. It can also record important scheduled meetings and reminders for the successful closing of sales. These self-sufficient and easy-to-use software packages are also available with virtual tour creators. In simple terms, clients can view a potential property through computer videos.

Real estate software separates rental or sale property listings. This information can be easily accessed and updated, depending on inputs by agents. This software is an effective medium for publishing property details online, over a secured network. Real estate software eliminates the need to hire technical personnel to update and manage real estate data. Local real estate agents can gain popularity through online and offline marketing venues made available by real estate software.

Commercial Real Estate - Big Profits

Real estate has always been known as the safest of investments.

In fact, real estate investment completed after proper research into and evaluation of the property (to determine actual and future value), can lead to tremendous profit.
This is one reason many people choose real estate investment as their full time job.

Discussions about real estate tend to focus on residential real estate; commercial real estate, except to seasoned investors, typically seems to take a back seat.
However, commercial real estate is also a great option for investing in real estate.

Commercial real estate includes a large variety of property types.
To a majority of people, commercial real estate is only office complexes or factories or industrial units.
However, that is not all of commercial real estate. There is far more to commercial real estate.
Strip malls, health care centers, retail units and warehouse are all good examples of commercial real estate as is vacant land.
Even residential properties like apartments (or any property that consists of more than four residential units) are considered commercial real estate. In fact, such commercial real estate is very much in demand.

So, is commercial real estate really profitable?
Absolutely, in fact if it were not profitable I would not be writing about commercial real estate at all!!
However, with commercial real estate recognizing the opportunity is a bit more difficult when compared to residential real estate.
But commercial real estate profits can be huge (in fact, much bigger than you might realize from a residential real estate transaction of the same size).

There are many reasons to delve into commercial real estate investment.
For example you might purchase to resell after a certain appreciation level has occurred or to generate a substantial income by leasing the property out to retailers or other business types or both.

In fact, commercial real estate development is treated as a preliminary
indicator of the impending growth of the residential real estate market.
Therefore, once you recognize the probability of significant commercial growth within a region (whatever the reason i.e. municipal tax concessions), you should begin to evaluate the potential for appreciation in commercial real estate prices and implement your investment strategy quickly.

Regarding commercial real estate investment strategies it is important that you identify and set investment goals (i.e. immediate income through rental vs later investment income through resale) and that you know what you can afford and how you will effect the purchase.

It would be wise to determine your goals then meet with your banker (or financier(s)) prior to viewing and selecting your commercial real estate.

Also remain open minded and understand that should the right (perfect)
opportunity present itself, your investment strategy might need to be revisited and altered, sometimes considerably.
For example: If you find that commercial real estate, (i.e. land) is available in big chunks which are too expensive for you to buy alone but represents tremendous opportunity, you could look at forming a small investor group (i.e. with friends or family) and buy it together (then split the profits later).

Or in another case (i.e. when a retail boom is expected in a region), though your commercial real estate investment strategy was devised around purchasing vacant land, you might find it more profitable to buy a property such as a strip mall or small plaza that you can lease to retailers or a property that you can convert into a warehouse for the purpose of renting to small businesses.

So in a nutshell, commercial real estate presents a veritable plethora of
investing opportunities, you just need to recognize them and go for it.

About the Author:
Dave Jarvis is a licensed Real Estate Broker in Florida and is Broker and Owner of Realty Concepts, Inc. a Southwest Florida Real Estate Corporation.
If you are interested in Southwest Florida Properties see his website at [http://www.rciflorida.com]

For additional Real Estate information go to: [http://www.realestateseekerusa.com]
For Real Estate Financing information see : [http://www.mortgageseekerusa.com]

Real Estate Leads For Realtors

Because real estate prices have dropped quite a bit, the potential commissions that real estate agents and brokers could earn have also dropped. But the drop in commissions can be more than offset by the amount of properties that can be sold. And getting quality real estate leads is one of the keys to making this a reality for real estate professionals. This is because there are so many more properties on the market now than there were before the bubble burst.

The rise in the number of homeowners who are underwater on their mortgages has increased so much that a very large number of them have decided that they cannot afford to stay in their homes. They would rather sell their home and buy a comparable home for a much lower price, and take the loss so that they can improve their cash flow situation by having a lower mortgage payment each month. And since there is no shortage of properties to buy, these people had no problem finding a suitable home for a good price.

And another result of the rise in available properties is that more and more people are becoming first-time homeowners. Since prices on homes are falling, more and more people are able to afford a home for the same amount they are currently paying in rent. So the logical choice for these people is to buy a house rather than continuing to rent.

These factors all lead to one thing - a higher need for real estate agents to help the buying and selling of all of these properties. Therefore, even though prices have fallen, the quantity of available properties, buyers, and sellers has raised which more than makes up for the lower prices in terms of how much a given real estate agent could make in the current real estate market. And as we all know, the more clients a real estate agent has, the more properties they'll sell and the more money they'll make.

The problem comes in when a real estate agent has already gone through their current client list. The best way for them to get more clients is to somehow obtain more real estate leads. Not only do they need more leads, they need high quality leads if they are going to be successful in converting a high number of them into clients who actually follow through on buying and/or selling one or more properties.

So how can you get more real estate leads? There are of course many different ways. These include buying them from an agency that offers them, advertising, subscribing to lead generation websites, developing and keeping current your own real estate website that draws potential

clients to it, and best of all by getting them through your own network. There are undoubtedly other ways of generating real estate leads as well, but these are the most common methods - all of which have proven to work to a certain degree.

One of the easiest ways to get real estate leads is by purchasing them. There are companies whose sole purpose is to find people who want to buy or sell a property. They then sell this information to people who are willing to pay for it. So if you are a real estate agent looking for real estate leads and either don't have the time to find your own, or simply don't want to, then this may be a good option for you.

There are two different major ways to do this. You can purchase the real estate leads from a company as a set of data that you will get in the form of a list or spreadsheet. Then you will need to start sifting through them and using the data available to qualify and categorize them yourself. And after that, it's time to start making calls to find out they are valid leads or not.

The other way of purchasing real estate leads is by subscribing to a real estate lead generator website that will send you much smaller lists of leads on a regular basis. This can be nice because the information is likely to be much more current than buying a single very large list of leads. But this also means that there are fewer to work with so it doesn't give you as much freedom in terms of choosing who to contact first.

Purchasing real estate leads or subscribing to a lead generation website can also be expensive. This can be a very bad thing since the whole intent of buying leads is to find clients, sell properties, and make commissions, if the leads that you buy don't turn into commissions. In that case, not only did you not sell any properties (or many properties), but you wasted money on worthless information, and you wasted time contacting worthless leads when you could have been working on finding good real estate leads instead.

Another way to generate real estate leads is by advertising. If you are a real estate agent, broker, or business person, advertising your services may be a good way to generate real estate leads. This type of lead generation is great because rather than you doing the work to find people who want to buy or sell a property, the tables are turned and they come looking for you instead.

In addition to having people try to find you instead of you trying to find them, there is another benefit to advertising to generate real estate leads. The people who are trying to find you are already definitely interested in buying or selling a property. This means that you don't have to worry about whether they are going to turn out to be qualified leads or not, because they definitely will be.

A similar way to generate real estate leads by advertising which can be even more effective than simply advertising on a billboard or in the paper is by setting up your own real estate website. Websites are surprisingly inexpensive to have hosted, and having one developed for you doesn't have to be expensive either. And if you learn the basics of website development, you'll be able to maintain it by yourself after it's been set up so that you can always keep it current.

The reasons to keep your website current cannot be understated. First, you have to keep it updated with the properties you are trying to sell so that the people who visit your website will have something to look at - and since this list of properties will be changing frequently as your client list grows and changes, you'll need to change your website often to incorporate the new properties and eliminate the ones that are no longer available.

A second reason for keeping your website updated on a regular basis your page rank will grow higher. Search engines use a number of factors to determine how relevant they are to certain keywords, and where to display them in a list of search results. And one of the biggest things that moves a website toward the top of the list is it's page rank, which is greatly affected by how active and how current the website is. So the more often you update your website, the higher its page rank will be, the higher it'll show up in search results related to real estate keywords, and the more visitors you'll get to your site.

Once you get visitors to your site, you'll be getting the exposure you want to potential clients for free. They can stay on your site for as long as they want to and look at as few or as many properties as they want to. And you don't have to do anything in order to help them. In fact there could be thousands of people all on your website at the same time. That is something that you would not likely ever have the opportunity to do in person. This phenomenon is what is known as leverage, and leverage is what can turn a small business into a fortune 500 business in short order when managed correctly.

The best way to do real estate lead generation also happens to be one of the most difficult - at least in the beginning. The method of finding leads is by building a very large network, and using it. This is one of the best ways to get leads because it is one of the most surprisingly effective ways. But unfortunately, it's also one of the more difficult ways to start, and takes a while to yield significant results.

The first thing you'll need to do is to start building your network. And it's not that you just need to start building it, you need to intentionally focus on building your network each end every day, no matter where you are or who you're talking to. This is because for most people, networking does not come naturally.

If you are like most people, you are probably somewhat shy and don't make it a point to intentionally meet and talk to new people on a regular basis. But if you want to build a network, you'll have to do exactly that. This is something that can come as a challenge to say the least, both emotionally and technically, but it is well worth the effort in the long run.

It can be emotionally difficult because a large part of building a large network is dealing with rejection. And if you want to build a large network quickly, you'll have to deal with a lot of rejection each and every day. Too many people, being rejected is taken personally and it ends up wearing them down so that they eventually give up before they gain the benefits that building a large network provides. But if you can learn how to not take rejection personally, you'll succeed where so many others have given up and failed as a result.

And networking to generate real estate leads can be done almost anywhere. When you need to put some gas in your car, park on the other side of the pump from someone who's already there and try to strike up a conversation where you'll be able to tell them that you're in the real estate business and can help them or anyone else they know who may be looking to buy or sell. And if you're really serious about it, you may want to only get $10 or some other small amount of gas at a time so that you'll need to go to the gas station more often and have more opportunities to network.

You can also build your network by meeting new people at any other place. You could talk to someone at the grocery store, library, church, waiting in line at the bank, or anywhere you are around other people for more than a few minutes at a time and starting a conversation wouldn't be too awkward. It can be done anywhere, with just about anyone, at almost any time. And the more dedicated you are to it, the faster you'll be able to grow your network and the better off you'll be in the long run.

Some of the best ways to network are by talking to the people you already know. These are people who are already in your network, and you can use them to help you grow your network even larger. The most obvious way is to simply ask them if they are interested in buying or selling a property in the near future, and to keep you in mind if they are.

But another way to help you grow your network is to ask them who they know that may be interested in buying or selling a property. You are basically asking them for real estate leads using different words. You could ask them for the names and numbers of people who they know who may be interested in buying or selling a property, or you could ask them to give your contact information to the people they have in mind when you ask them that question.

It's a great idea to have business cards with your contact information made up when you're networking. That way you won't have to rely on people's memories which are definitely not the most reliable things when compared to something they can simply read from a card. Cards on the other hand make it so that the person you are giving your contact information to doesn't have to rely on their memory, and it puts forth a more professional image as well which can only benefit you.

Real estate values have taken a dive and one of the results has led to there being many, many more properties on the market now compared to before the economy took a dive in 2008. This means that even though the prices are lower, the higher quantity of properties on the market make it possible to buy and sell more of them and make more money in commissions as a result which will more than make up for the decreased individual property values.

I order to sell more properties you must have more clients. And to get more clients, you need to have more real estate leads. These real estate leads can be generated in a variety of different ways, all of which can be useful to real estate professionals. Having reliable leads will definitely result in more clients, more sales, and more money made in commissions. Purchasing them, advertising for them, or getting them from your network is all great ways go get leads that all have their own strengths and weaknesses. Pick the one that will work best for you, and you'll be on your way to making more money through real estate in less time that you think.

Find Real Estate Notes

The Internet is an ideal place to look for real estate notes. Lots of websites offer information on real estate notes for sale. These websites contain relevant information such as the value, dates and contact numbers. Websites often provide long lists of real estate notes offered for sale. Those advertisers charge you a small fee for their services. The greatest advantage of an online search is that you can compare prices and assess the viability of several real estate notes. You can also aim for high discount rates.

Lots of real estate note brokers are out there. They can advise you on where to find real estate notes and how to purchase them profitably. Real estate note brokers are able to tell you about the odds of purchasing. If you hunt for real estate notes on your own, you will have to handle the paperwork associated with the deal. Real estate note brokers can do the paperwork for you and help you observe all legal formalities. As all real estate dealings can invite legal complications, it is highly advisable to seek the help of an agent or broker. You will have to pay a small fee for the services of real estate note brokers.

Real estate notes are also often advertised in newspapers and real estate journals.

Another way to find real estate notes is through family, friends and well-wishers. Yet another method is to keep track of the real estate business in your area. Through this, you can get an idea of the real estate notes that exist in your area.

Real Estate, Real Property and Leased Land; Definitions, Discussion and Explanations

Delaware, and the rest of the original British Colonies, has some land that is leased rather than owned by the residents of that land. Much of it is not evident to the casual observer.

The land on Lewes Beach is leased, not owned by the home owners. The land of Lewes Beach is owned by the Town of Lewes. The lands of Rehoboth by the Sea and Dewey Beach include leased land too. Most of the leases on that land will NOT be renewed but will return to the owners and the homes on top of that land will be removed by the home owners at their expense. Much of the land in Riverdale, on Indian River Bay, adjacent to Oak Orchard is leased as well. In Riverdale the leased land is owned by Chief Clark of the Nanticoke Indians.

We have about half the inhabitants of Sussex County living on leased land; most of that leased land is found in what people call mobile home parks or communities. However, in those communities there are seldom any homes that are truly mobile and there are even two story stick built homes on some of the leased lands in those communities. Condominiums and town houses are sometimes found on leased land as well. Some folks find all this rather difficult to understand.

We Realtors and Attorneys use the term fee simple to describe land that is being sold as real property; that is real estate. We used the term leased land or leasehold interest to describe land that is not transferring as real estate.

This rather lengthy text is regarding Leased Land, Real Estate, Private Property, Chattels, Mobile Homes, Homes on Leased Land and a legal dissertation to define, describe and determine the differences.

Terminology is important when discussing Real Estate, i.e. real property.

Black’s Law Dictionary is the recognized, definitive source for legal definitions under our American Law; which is derived from English Law

PROPERTY: In the strict legal sense, an aggregate of rights which are guaranteed and protected by government. BL6, p. 1216.

PERSONALTY: Personal property; movable property; chattels; property that is not attached to real estate. BL6, p. 1144

PROPERTY: (personal property) - In broad and general sense, everything that is the subject of ownership, not coming under the denomination of real estate. A right or interest less than a freehold in realty, or any right or interest which one has in things movable. BL6, p. 1217

Therefore personal property, is that which can be easily removed from the real estate, and is not real estate. Personal property includes crops, trees, shrubs, trailers, sheds, cars, mobile homes, manufactured homes that have a Department of Motor Vehicle title instead of a deed, and the contents of a home or building. In a home or business the personal property includes drapes, lighting fixtures, rugs (not installed carpeting) free-standing cabinets and cupboards, furniture, and all the contents of closets, drawers and buildings. Buildings without a foundation, that is sheds that are just supported by blocks are chattel property, that is personal property, and not part of the real estate. Such chattel includes dog houses and particularly the little storage buildings that are so common outside of homes today.

LANDS: In the most general sense, comprehends any ground, soil or earth whatsoever... Black's Law dictionary 6th Ed. (BL6), p.877

PRIVATE PROPERTY: As protected from being taken for public uses, is such property as belongs absolutely to an individual, and of which he has the exclusive right of disposition. Property of a specific, fixed and tangible nature, capable of being in possession and transmitted to another, such as houses, lands, and chattels. BL6, p. 1217. Private property is land, houses, and chattels. Private property is protected from being taken for public uses. Private property is owned absolutely.

REAL ESTATE synonymous with real property" and p.1218 REAL PROPERTY ... A general term for lands, tenements, hereditaments (those things which are hereditary); which on the death of the owner intestate, passes to his heir." BL6, p1263

ESTATE: The degree, quantity, nature and extent of interest which a person has in REAL and PERSONAL property. An ESTATE in lands, tenements, and hereditaments signifies such interest as the tenant has therein. BL6, p.547 The definitions here all refer to: real estate = real property = estate = lands, tenements, and hereditaments. At first, one might think that ‘real property' is the proper term for 'all lands'. But it doesn't state the manner of ownership as clearly as the definition of estate. We just had a huge instance of this when the thousands of leased land lots under the homes of several thousand people, in Angola, Pots Nets, and Long Neck areas owned by the Robert Tunnel family was inherited by the children.

IN OUR AREA THERE ARE NUMEROUS LEASED LAND PROPERTIES AND THOSE PROPERTIES ARE THE REAL ESTATE OF THE OWNER OF THE LAND – NOT THE OWNER OF THE HOME WHICH IS UPON THAT LAND. If you examine the definition for ESTATE it refers to an interest in the same articles defined in real property and real estate.

What is this LAND and WHO owns it and HOW is it owned? Land can be private property OR estate, i.e. real estate. Estate is an interest in “real property" by a person or a tenant. Private property is owned absolutely by an individual.

INTEREST: More particularly it means a right to have the advantage of accruing from anything; any right in the nature of property, but less than title. - BL6, p.812. By this definition it's clear that INTEREST cannot be TITLE, since it is less than title. Interest may be a property right to land, but it's not a right to absolute ownership of land. Those who live on leased land, thus, have only an interest in the land; and that interest is a lease-hold interest. Is there a definition of property that says it's land held in absolute ownership, as does private property's definition? We can delve into this more.

ABSOLUTE TITLE - As applied to title to land, an exclusive title, or at least a title which excludes all others not compatible with it. An absolute title to land cannot exist at the same time in different persons or in different governments. BL6, p.1485

PRIVATE PROPERTY - ... is such property as belongs absolutely to an individual, and of which he has the exclusive right of disposition. BL6, p.1217

OWN - To have a good legal title; to hold as property; to have a legal or rightful title to; to have; to possess. BL6, p. 1105. To "own" is to have title. An interest is LESS THAN TITLE.

ESTATE: The degree, quantity, nature and extent of interest which a person has in real and personal property. An estate in lands, tenements, and hereditaments signifies such interest as the tenant has therein. - - BL6, p.547 From these definitions, it's plain that we can't absolutely "own" real estate. We can only have a qualified ownership of qualified and described ownership of Real Estate. Thus, we need that Deed Description to describe it and qualify it. That ownership is also qualified by various government rights, decrees and laws, from antiquity, such as rights against trespass. That ownership is qualified by taxation, zoning, rights of way, and a myriad of other entailments. We need, therefore, a title search to determine those entailments, some of which are invisible.

Therefore there is NOT as much difference in the rights and privileges of ownership and interest as one is led to believe. I have no problem with those who live on leased land instead of owning the land. Usually they are paying far less than it would cost them to own the same property. However, they don’t often get any appreciation of the land; the landlord gets the appreciation in real value, while the resident can appreciate the lifestyle for less cost per month or year.

However, since an interest in leased land is not automatically transferable and is NOT Real Estate and since the chattel property upon it, the mobile home is personal property, without a deed but instead has a title – Realtors are not by law supposed to be involved in the sale of such – but we are. We are supposed to only be selling real property. It gets all cloudy and foggy doesn’t it. That is why there are people and companies who sell mobile homes on leased land who are not realtors and don’t need to be. In fact, although no one will discuss it, Realtors are not supposed to sell mobile homes on leased land. We don’t need to engage in that battle any more than I just did by describing it.

OWNERSHIP: The complete dominion, title, or proprietary, including right in a thing or claim... Ownership of property is either absolute or qualified. The ownership of property is absolute when a single person has dominion over it, and may use it or dispose of it according to his pleasure, subject only to general laws. The ownership is qualified when it is shared with one or more persons, when the time of enjoyment is deferred or limited, or when the use is restricted. - BL6, p. 1106 Such sharing is common with husband and wife, partners, families and corporations, etc.

DOMINION - Generally accepted definition of "dominion" is perfect control in right of ownership. The word implies both title and possession and appears to require a complete retention of control over disposition. - - -BL6, p. 486 I think you'd agree that zoning, building codes, home owners association covenants, condominium documents of use and business licensing is a restriction on the use of land (if it's Real Estate). And there is obviously the fact that failure to pay property taxes on real estate will result in loss of said property. That's definitely not absolute ownership. But private property is defined as ABSOLUTE OWNERSHIP, not qualified (interest).

PROPERTY (tangible) - All property that is touchable and has real existence (physical) whether it is real or personal. - - BL6, p. 1218 In summation, it takes a good attorney, and one well versed and experienced in real estate to understand the complex definitions, rights, liabilities, and privileges of real estate ownership. I have been buying and selling real estate for myself and assisting others in the buying and selling of real estate for thirty years. I have taught courses on real estate and real estate law. And, I would NOT consider purchasing a property, or purchasing property on leased land without the professional and paid assistance of an attorney who is a real estate specialist in the exact county in which the property is located. Other attorneys from other areas are not valid choices at all.

Copyright © 2001 - 2005 by www.JodyHudson.com>

Real Estate Investing Guide-Learn About Real Estate Investing

Real estate investment is a great opportunity to earn profits and generate a cash flow. There is a slight difference between real estate investment and other types of investment. Real estate investment can be categorized as a long-term investment or short-term investment. Good real estate investor has ability to invest in real estate at right time.

Real estate investment requires proper knowledge and concentration to invest in good piece of land. Sometimes heavy investment gives wrong results in the future and sometimes with a small investment you can earn more. Investors should be alert at the time of investment in real estate.

If you're going to rent your property you should have sufficient knowledge about tenant problems and requirements of tenants. You should be aware of all financial as well as legal requirements for your real estate. Investment goals are the primary factor for real estate investment. Decide your investment goals like what you want to do with your real estate.

Real estate market offers different types of strategies to invest in real estate. You should choose the best strategy as per your needs. Efficient real estate investors are able to make their fortunes in real estate business. People who invest in this business can live comfortably. They don't have any tension about their survival. They can earn more and more profits with single right time real estate investment

Investment in real estate requires great commercial skills and knowledge like other businesses. Real estate business needs additional risk because sometimes you're at risk in this business. Thats why a person with a great will power can easily handle this business. Forecasting in real estate investing can spoil your future so don't overestimate your investment.

Real Estate Agent And Real Estate Broker - Two Sides To The Same Coin

A real estate agent is often confused as a real estate broker, although both differ with their work profiles!

Earlier both of them were seen as a salesperson who deals with real estate market. They were involved with selling properties and hence these terms transposed. But now finesse has crawled in with progressing times. Services have augmented and so have people associated with them.

Though there is no perfect demarcation between them, still there are some disparities that allow them distinct designations. The entire role of a real estate agent has evolved from a salesperson whose occupation primarily was to sell properties. Now a real estate agent is a key person whilst dealing with property. He not only aids the trader in selling the property rather he also assists the buyer in various property matters. He is reminiscent of a manual to be consulted whenever one is planning to buy or sell their property.

A real estate agent and a real estate broker are essentially a pedestal rather an interactive media via which the entire transaction process takes place. In some places, a real estate agent is acknowledged differently as compared to a real estate broker. They are the licensed professionals working in the same field but their functional areas differ to a certain extent.

Talking about a real estate agent, he is basically a fresher who steps into the world of property transactions immediately after completing his academic studies or his training for being a real estate salesperson. This training consists of a course varying from forty to ninety hours and then undertaking an exam, passing in which would entitle him for a license of a real estate person or a real estate agent. But he certainly cannot work alone, he needs further supervision of a real estate broker and hence one must be allied with him for his work.

A real estate broker is an experienced real estate agent. The only distinction between a real estate agent and a real estate broker is the experience in form of years spent as a real estate agent.

It can be said that a real estate agent on maturity becomes a real estate broker. For this transition to occur he needs to appear in broker's state exam and on qualifying that exam he gets a license for real estate broker. A real estate broker may work in partnership with other brokers to form business alliances or he may undertake some real estate agents to work under him.

Both real estate agent and real estate broker share the same field of work but the major difference lies in their working experience, where a real estate broker is better experienced than a real estate agent.

Real Estate Flipping - Is Flipping Real Estate the Smartest Way to Get Started in Real Estate?

Real Estate Flipping - Is Flipping Real Estate the smartest way to get started in real estate investing?

"Flip This House", "Flip That House", "Property Ladder",... and on and on...

Over the past couple years you and I have been hammered on TV with real estate flipping shows that depict these people making outrageous profits flipping homes and making it look easier than heck.

So, is this flipping stuff real? Well... it sure is. There are countless people out there making a darn good living flipping homes. But... the tv shows on flipping are darn deceiving when it comes to the "reality" of real estate flipping.

Is flipping real estate the best way to get starting in real estate investing? I'll let you decide for yourself. However, in my opinion, for most people, especially in today's down markets (not all markets are down... there are actually some doing really well), real estate flipping is not the best way to get started in real estate investing.

Here's why:

First, let's clarify two kinds of flipping.

1. The Fix and Flip - Where you buy real estate, rehab it, and sell it to a retail buyer. The kind that is on the TV shows.
2. The Wholesale Flip - Where you buy real estate (or get it under contract), find a wholesale buyer, and flip the contract. The kind that is less glorious... but has a ton of money in it... with a heck of a lot less risk.

To me, the Fix and Flip method is not for most newbie's... even though that is the kind of real estate investing you see on TV all of the time.

Why?

• You need a good understanding of rehab costs
• You need to have good funding... either from a private lender or a bank (private lender is preferable)
• You need to be able to float the carrying costs if you can't sell the property quickly
• If you don't calculate your costs just right... there may not be a whole lot of room for error... and room for error means greater risk on you!
• The market is in a downturn... so there are less retail buyers out there for middle income houses... which is what most people start out flipping

There are many people out there making a very good living flipping... but most of them started several years ago... and have many flips under their belts.

They already have systems down, have marketing channels for getting buyers, have solid lending sources, etc. Not to say that new real estate investors cannot do all of the above... YOU CAN!

But, there are better ways to get started in real estate investing that allow you to get in with little or no risk or money, and will allow you to learn the Fix and Flip business before you ever take a huge money commitment to do so.

What's the single best way (in my opinion) to get started in real estate flipping to minimize your risk and shorten your learning curve... all the while making nice money in the process? Well... obviously option #2 from above: The Wholesale Flip - or in other words... wholesaling real estate, flipping houses for quick cash, flipping contracts, etc.

When you wholesale real estate you do everything a flipper would normally do... except actually repair the property and sell it to a retail buyer. But, you don't have the risk or time commitment that a fix and flipper has.

Basically, you as a wholesale real estate flipper (or wholesaler for short), find properties that need work that you can purchase at a large discount and flip them for a fee to a rehabber who will do the work.

Your job is to find the properties, analyze the numbers to determine the repairs needed, create an offer that enables both you and the rehabber that you will sell to to make a profit, and sell the contract to a rehabber who will actually make the repairs.

Often times real estate investors will make between $2,000 and $20,000 on a wholesale deal. So, for a low to no risk way to get started in real estate... there are huge profits to be had.

Another reason for starting out doing wholesale real estate deals is that you learn the ropes of what it takes to be a rehabber. After analyzing several deals and talking to rehabbers to find out what they look for... you will have a good grasp on what a good deal is, how to accurately estimate repair costs, who the rehabbers use as contractors, etc.

So, you actually make money while you are getting a hands on education on real estate flipping and rehabbing.

Anyhow, I didn't start out to write this article to scare you from the fix and flip mindset. There is good money in it...

My motivation to write this article is to help guide new real estate investors away from the glorified version of rehabbing that is plastered all over TV... and point you toward what I believe to be the best way to get started in real estate investing.

I have something to confess...I may be a bit of a hypocrite... but I didn't start with wholesaling. I actually started with buying income properties. But, with today's markets... wholesaling real estate is the way to go to get your feet wet and make some serious money in the process.

There is much more to real estate flipping and wholesaling real estate than the TV "reality shows" show. One of the best ways to learn the ropes is to learn from someone who does it everyday and makes a solid living doing it.

1. Go to your local REI club and hook up with an experienced mentor
2. Go out on your own and try to hack it yourself with no instruction (not advised)
3. Invest in a quality, step by step multimedia course that walks you through A - Z on the exact blueprint that successful wholesalers and real estate flippers use.

If you want to go the route I took, the wholesaling course that I actually still use today is shown below.

The real estate wholesaling and real estate flipping course that I think is by far better than any other out there is below. They always way over deliver and they are the only "gurus" out there that I can truly say are trustworthy and good people. I've bought a ton of courses, and the Wholesaling for Quick Cash (link below) is the only one I'd recommend.

The Wholesaling Course I Recommend - Most Actionable one I've seen

So, whatever you do to get started in real estate investing, just do it. Taking the wrong action is better than taking no action at all.

Good luck... and Cheers!