By Peiying Peng & Liz Zed

Making Money–How to invest safely in Real Estate that will bring you profits and equity

Many people are sitting on the sideline these days when it comes to real estate investment. Scared. You need not do the same if you know how to make money in this market. The euphoria over the real estate market is over, and the down turn market wind has blown away the shaft of red herring investors. Now is the perfect time for the sophisticated you to get involved, if you have not done so.

If you are cash rich, congratulations. You have your pick. You can drive a bargain in many desirable areas.

If you are not cash rich, but want to invest, congratulations, too. You are a smart one. You might need to do a bit more work than the cash rich counterparts, but the reward is still huge.

Here are your check list for investing in this real estate market.

§ Due diligence

That goes without saying. But I still want to put it here first. Especially for those who belong to any real estate mentoring club, where you feel that most of the deals have been researched. Do your own homework. Call the local property manager to check on the rents. Don’t listen to your agent only.

§ Cash (flow) is the King

Robert Kiyosaki has been drumming this in our ears for years, that positive cash flow is a key element in real estate investment. This is largely ignored in the last few years when anybody seems to be making money in any market. Now the market is coming to a soft landing, pay attention to your wallet. Positive cash flow lets you sleep well at night. People who ignore this rule and only focus on building equity have come to some really tough moments in the last year or so, and the situation might not improve for them for at least another year or so.

§ Hot market is the market you know, not the one your neighbor knows

Do you really want to follow everybody to invest in a market that is overheated? The answer is not so simple. Know your market before you invest. What everybody says has value, but only so much. Listen to the experts, but don’t trust them. Ultimately, you are the one paying the mortgage. Know the real estate cycles, and if the top market has been really hot for 3 or 4 years, it might not be the best time to get in anymore.

§ Know your risk tolerance.

And if you have a family, know your family’s risk tolerance. When unexpected element hits, a different risk tolerance between spouses can cause relationship strife. Talk before you invest.

§ Long term vs. Short term

If your risk tolerance is low, a short term, quick flip might not be your thing. 3/2 family houses in stable areas with low equity play but positive cash flow probably will be your best bet.

Most of all, this could be your best time to invest if you know how. Get into a group to talk about your ideas. Join our online community to ask questions and give your answers, too. And may you make loads of money : )