|3 Top Real Estate Investing Methods for Maximum Wealth
Real Estate investing can be used to gain wealth in three major ways
1. Long-term Real Estate investing is most often utilized using appreciation as a planning
Historically, Real Estate has doubled in value every 11 years (6% per year on average over the
Of course, not all areas have seen that much appreciation, while others (like sections of
California and Nevada) have seen double or triple that rate, but overall, a 7-11 year cycle of
doubling value has been the ‘rule’.
So, a house worth $100,000 today will be worth $200,000 after 11 years (on average).
The best part about this plan (when it comes true) is that the debt on the house after 11
years will be less than the original $100,000 (because payments were made for all that time), while
the property is worth $200,000.
The difference makes a great retirement ‘nest egg’.
2. Instant cash is available in many types of Real Estate investing transactions where money
is made within days or weeks (sometimes hours, and even minutes!) of the purchase.
These transactions are often referred to generically as ‘flips’ (a more detailed description
of these transactions is given below).
When the money made from these transactions is used to reinvest in other ventures, the return
rate highly exceeds any other method of Real Estate investing. The reason for this is that, on a
property valued at $100,000, the purchase price is often 10-50% less.
With an example of 15%, the purchase price will be $85,000. Selling the property at a discount
to another buyer for $95,000 will net well over $5,000 (after closing costs and all expenses).
The $5,000 used as investment money for another transaction will yield an additional discount
on that property, and when you continue to ‘roll’ the money made from such real estate investing
activities, you eventually lead to ‘full cash’ purchases, which is usually what is needed to acquire
most 30% or more discounts from sellers.
This method of Real Estate investing (buying low, selling high and re-investing) yields
extreme wealth plus, the first property could have been done as a ‘no money down’ transaction!
Extreme wealth from nothing where else can you find this except in Real Estate investing?
3. Cash flow properties are often used in cooperation with appreciation (one of the biggest
benefits of Real Estate investing), however, is listed here as a separate system because many investors
do not count appreciation into their calculations when purchasing a property.
Cash flow properties are those with some monthly income that is, the difference between what
is paid in and what is paid out. Traditionally, these are ‘rental’ properties, and bring in a constant
flow of cash for the investor.
Sadly, many investors use this cash for their living expenses and never grow the wealth they
could by simply reinvesting this money into another property.
Although slower than other techniques, this method of Real Estate investing can yield a very
high rate of return for the careful investor.
Steve Majors - The Lazy Investor
Active Real Estate Investor, author of ebooks, training courses and seminars,
provides one-on-one mentoring and coaching.
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