By Sara Pullan Geimer, REALTOR® Magazine
Dreaming about securing your financial future by investing in real estate? Maybe it’s time to stop fantasizing about it and do it. In 5 Magic Paths to Making a Fortune in Real Estate (New York: John Wiley & Sons Inc., 2000, $14.95) author and REALTOR® James Lumley details the most profitable methods of investing in property based on his 30 years of experience.
His five paths to riches are common approaches to real estate investment:
- Buy fixer-uppers to repair and sell at a profit;
- Rent-to-own from a seller and then contract a future sale with a new tenant-buyer;
- Buy or control a property to wholesale or “flip” to another investor;
- Buy and hold single-family houses; and
- Buy and hold multifamily rentals or small commercial properties.
But the magic in this 294-page book is the practical step-by-step instructions on how to succeed at each strategy. With a fixer-upper, for instance, you must obtain precise repair estimates before making an offer, Lumley says.
Focus on one of the five strategies to start and then build on your growing expertise by borrowing from other strategies when appropriate.
“The real road to wealth is to put a combination of these strategies to work for you based on what’s happening in your market area,” he says.
For example, specialize in fixer-uppers when you run across a house that you can lease. Re-rent it at a higher price and put some of the cash you earn into a multifamily purchase.
The book includes detailed sample calculations and worksheets to help estimate such figures as profit potential, the costs of home repairs, and multifamily income and expenses.