As the last few years have shown, investing in real estate can be almost as volatile as investing in stocks.  Overall real estate is still a safer bet to build growth but it still needs to be done carefully.   Buying investment real estate is like buying a business.  Your not only buying the real estate but often the cash flow or potential cash flow of a property.

In order to make a smart buying decision you need to do your due diligence, research the neighborhood and don’t over reach your purchasing ability.

More importantly buy for cash flow.  Real estate investors who purchase properties with positive cash flow after all expenses, even if its just a little are much better off and can survive the down market like we are in now, then those investors who relied only on appreciation.

There is a place for speculative investing, like fix and flip, or negative cash flow purchases but they should not be focus of most real estate investors.

Achieving positive cash is much easier with multifamily properties then houses.  For instance, a $350,000 home may rent out for $1,300-$1,500 monthly rent while a $350,000 fourplex can bring in $2,500 to $3,000 monthly rent. 
There are benefits and downsides to both types of properties but in either case cash flow should be a major focus.

In future articles we will focus on analysis of sample properties,  we will point out good deals and we'll discuss real estate investing in general and in detail.

If you'd like to discuss your real estate investing plans give us a call, we'd love to help.