10 ROADS TO REAL ESTATE INVESTING PROFITS TAMERA ARAGON
6. Buy Property with Forced Appreciation. Buy in the path of growth and holding until values rise. For
instance, buying a lot in a residential development, prior to roads being completed.
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Advantages: Can yield large profits, especially if you buy low to start.
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Disadvantages: Future price is not predictable – the market can turn, the developer can go out of
business. You have expenses with no income while you’re waiting.
7. Preconstruction Investment Property: These types of investment properties are acquired directly
from a developer before the construction or renovation is completed.
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Advantages: Low money out of pocket to tie up property while being built. If purchased in
appreciating markets, you make money in equity at closing and can instantly re-sell at a profit.
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Disadvantages: You can’t always predict what a market is going to do. If market depreciates, you
have lost money. Also, higher tax rates if you sell quickly.
8. Pre-Foreclosure Investment Property: These types of investment properties are the ones which
you buy from sellers who are behind in their payments and may lose their property to the bank via
foreclosure.
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Advantages: You have opportunities to buy properties at below value pricing – “Instant equity”.
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Disadvantages: Legal liabilities are higher. Finding these properties requires a lot of research and
footwork to find a deal that works. You can do all the work and still not have a deal with enough
equity to profit, after expenses to sell, (taxes, realtors, etc.).