John Coons
Realtor®
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By John Coons
Part 4
Speculation
An example of speculation is buying land in an area where there may be
an new road planned, or a new town may be developed. Another example is
to build a home speculating that someone will buy it. You are not building it
for a specific buyer. You're building it on speculation. This is often called a
"Spec. Home."
Distressed Property
Distressed property includes foreclosure, probate, tax sales, etc. These
are the things you see people talking about on get rich quick TV commercials.
Don't belive everything you hear about how easy it is to make money doing
this. There is usually a lot of competition to buy these properties, and they
often sell for more than they should.
Bank Owned Property - REO
This is a good source for good buys. When the market is going up the REO
market dries up. This is part of the foreclosure process. For more info. see
the foreclosure page.
Buy A Broken Business & Fix It
This method of investing applies to real estate and other businesses. I like real
estate because I think it is more predictable than most other businesses.
Example:
Buy a hotel that is not managed well. Often small hotel owners have not
maximized the rent, and are not advertising the hotel enough to maximize
their income and profits. You should not over pay for this hotel business
when you buy it. After getting the profit and income up for a couple years
you may be able to sell it for more based on the new income and profit.
The same can be done with a bed & breakfast and other businesses.
There are lots of other factors in business. You should know about running
the kind of business your are buying, or have cash reserves to make up for
mistakes.
End Of Strategies
