How do the wealthy invest in real estate ?

: Real estate question?
Real estate Investing to me means buying a second home(to sell or rent ) , or buying an apartment and renting it out . I think you get profit either through selling the property or by collecting rent . Is this right ? Are there any other types ?

What does the average real estate Investor invest in ? apartments , second homes ?

How do the wealthy invest in real estate ? is it the same strategy ? Do they just buy multiple houses like 3-4 and sit on them and then sell ? Do they sue them to rent them out etc or mainly try to just hold and sell? what other types of real estate would they buy ?

3) Finally do you need property managers for the average real estate investor ? If i bought a second home that i want to sell or rent out , do i need a management company ? I mean how would i fix the leaks or plumbing for my tenants ? Do you think you can handle the marketing and all the maintenance of the property on your own ?
Please answer clearly and answer all parts of the question . I prefer someone who actually has experience to answer my novice questions .

I don’t want opinions or copy and paste or other “It depends” types of answers .

Answers and Views:

Answer by Phyl Mar
Ordinary investors buy rental houses. Wealthy investors buy commercial property. No, they do not buy them for resale value; they buy them for the rental income. No, you do not need a property manager. If something breaks you call a professional to go fix it. There is no marketing involved; you just run a For Rent ad in your newspaper.

To make money you have to buy a house that’s listed below market value; otherwise your mortgage may be more than the income you receive.

I bought 3 houses and rented them out. To me they were more trouble than they were worth. Tenants often complain needlessly and they sometimes fail to pay the rent and you have to go through the eviction process.

Answer by sophieb
you get “opinions” on YA and points for this “game”. For a professional opinion you’d have to pay a person in that profession.

Investing usually means making a profit. today homes have lost their value; those people selling their homes today well their mortgage payments are higher than what the home is worth so they’re getting out from under. So now is still the time to buy before the rates go up. Whether a person will make a profit or not these days is questionable. It used to be that renters would make their payments and would help to pay off your house. today there are evictions and suits and income losses or people who ruin the house so you’d have to fix it up when they leave, so I’m not so sure the profit is there any longer in renting homes out.

Although I’ve heard that flipping properties is illegal it may be illegal only in “some” states. Investors buy homes cheap but sturdy, and have a crew come in and fix up the home inexpensively because they buy in bulk, and then sell the home for a “small” profit, then move on to the next home to do the same thing (of course they pay their crew the going rate). Today the homes a person would buy would be the foreclosed on ones and they would need a “lot” of work so you’d hesitate. To start flipping a person needs money (can’t borrow it), so usually it’s lawyers and doctors who do those types of things. To make money one needs to have money. The wealthy also know when to get out of a deal, when it’s going south, they have that 6th sense. And sometimes even wheeling and dealing is something their family has done so they have a support network.

A person doesn’t “need” property managers but they do that to remain anonymous, as well as for the purpose to give them time to do other mort important things. If you go to a realtor you don’t need to market the place, they do that. They check the credit, check the references, the employment, the criminal background and all for you. You just sit back and give directives. They do the work and provide you the figures. You just pay for the service. Certainly people who do this start with money, have a network with other investors and know how to deal.

I’d suggest you take a real estate course or two, or read up, ask questions of the instructor, etc. so you know all about houses, rentals, land, laws and such before you begin.

Answer by Tommy Gilbert
You can invest your money by buying a condo in prime location as it is the best thing to invest your money. I recently bought a condo from new condo solutions and hence am advising you too to invest in the same.