There are many philosophies pertaining to real estate investment, but most will fail to make you a good, long-term passive stream of income.
Most of these are great, though, if you'd like to trade.
However, this article is about real estate investment.
So, let's begin.
First, if you don't have a bunch of money, save some.
Take as long as you need, even five years is okay.
Once you have enough money, start looking for homes with the help of realtors.
You'll need to look in degraded properties.
Make sure the property, though, is structurally sound.
Find out how much it costs per square foot of new construction in your area.
Then, you'll need to calculate how much it would cost (rough estimates are all you need) to fix the property to a level on par with new construction.
The difference between the new construction cost of the property you find and the price you pay needs to be double this number you calculated.
This extra "wiggle room" is a safety margin which will protect you against unforeseen falls in the market.
Also, check the average rent per square foot in the surrounding area (also the amenities offered) and see how much yours is.
Make sure that you can rent for just below the average rent, but still be able to make out on your mortgage, taxes, and insurance.
Don't worry about making a profit.
Positive cash flow is extremely difficult of residential properties.
Now, buy the house, and make sure you rent it immediately for the highest you can.
Start working on it, even when the tenant lives there.
Most tenants don't mind you fixing up their place; they often welcome it.
You don't need to have a bunch of money to do this; whatever you were saving before is what you'll use.
Stop saving and start spending.
This step can take a couple or a few years, if you need; there is no rush.
Once the house is fully repaired, you should re-evaluate the rent, which you will find can be higher; raise it.
Now you have more equity in the home, because the home can bring in more revenue.
List this house on the market to sell.
Start looking for an apartment building with more units than your previous ones, but the rest of the criteria still applies (cost per square foot estimates, repair estimates, etc).
Then, propose a trade.
You'll always want to trade up for property instead of selling.
This way, you will save a tremendous amount on taxes, and you will have more money to work with.
Do the same thing to this house that you did to the last one.
When it's ready, you should be able to afford an apartment with more units, again.
Do this one more time.
Now, you should find yourself with a giant number of apartment units.
Now, positive cash flow is there.
Sit back, relax, and enjoy the hard work that your investment is doing for you.
Most of these are great, though, if you'd like to trade.
However, this article is about real estate investment.
So, let's begin.
First, if you don't have a bunch of money, save some.
Take as long as you need, even five years is okay.
Once you have enough money, start looking for homes with the help of realtors.
You'll need to look in degraded properties.
Make sure the property, though, is structurally sound.
Find out how much it costs per square foot of new construction in your area.
Then, you'll need to calculate how much it would cost (rough estimates are all you need) to fix the property to a level on par with new construction.
The difference between the new construction cost of the property you find and the price you pay needs to be double this number you calculated.
This extra "wiggle room" is a safety margin which will protect you against unforeseen falls in the market.
Also, check the average rent per square foot in the surrounding area (also the amenities offered) and see how much yours is.
Make sure that you can rent for just below the average rent, but still be able to make out on your mortgage, taxes, and insurance.
Don't worry about making a profit.
Positive cash flow is extremely difficult of residential properties.
Now, buy the house, and make sure you rent it immediately for the highest you can.
Start working on it, even when the tenant lives there.
Most tenants don't mind you fixing up their place; they often welcome it.
You don't need to have a bunch of money to do this; whatever you were saving before is what you'll use.
Stop saving and start spending.
This step can take a couple or a few years, if you need; there is no rush.
Once the house is fully repaired, you should re-evaluate the rent, which you will find can be higher; raise it.
Now you have more equity in the home, because the home can bring in more revenue.
List this house on the market to sell.
Start looking for an apartment building with more units than your previous ones, but the rest of the criteria still applies (cost per square foot estimates, repair estimates, etc).
Then, propose a trade.
You'll always want to trade up for property instead of selling.
This way, you will save a tremendous amount on taxes, and you will have more money to work with.
Do the same thing to this house that you did to the last one.
When it's ready, you should be able to afford an apartment with more units, again.
Do this one more time.
Now, you should find yourself with a giant number of apartment units.
Now, positive cash flow is there.
Sit back, relax, and enjoy the hard work that your investment is doing for you.