Mohsen “Max” Motamedian Shows - How to Make Money in Real Estate

Many perceive that it is straightforward to make money in real estate. This is not true, and you are most likely going to witness organic growth in your wealth when you invest in real estate. Many people start investing in real estate to get short-term gains, but this can be challenging. You need proper guidance from an expert to make money in real estate. Otherwise, you may even end up making a loss. This is like any other business, which comes with the risks you need to manage. Mohsen Motamedian is one such expert who can help you manage your money while investing in real estate.

Max Motamedian tells you how you can make money in real estate with reduced risk and maximum cash flow. This can be a great starting point for many of you, and it can even help you diversify your portfolio. It is not necessarily important to stay invested in real estate. As per Max Motamedian, you can make profits with short-term sales. Before we share the tips to make money with real estate, let us mention that buying real estate for rental income and waiting for capital gain is a terrible idea. So, let us see his recommendations for making money from real estate.

How to Make Money in Real Estate?

1. Flipping Real Estate

The first way to make money using real estate is by flipping the property. You can look for distressed sales or regular sales in this case. You can purchase any property and renovate or rebuild it. If the original property is in bad condition and you are getting it at an under-valued price, you will be able to make a good amount of profits. Flipping real estate has become a popular business model, but it certainly comes with risks. Mohsen Motamedian suggests that you must not try to be an outlier. For example, he says that don't try to build a luxury home in an average neighborhood. You will only lose money with that. He also recommends monitoring all the expenses properly so that you don't bite into your profits later. Remember that you need to have deep market knowledge & time to flip a property.

2. Short Buy Or Contact Flip

Using short buy or contract flips is another way to make decent money using real estate. You can earn money this way even if you don't have enough capital. For example, you don't have enough capital to buy a property. You start here by finding the distressed assets, and on the other side, you start the efforts of finding a prospected buyer for the same property. If you can find both parties simultaneously, it will cut the need to invest your capital. Max Motamedian suggests that you can cut your risk by finding both parties together. If you find an undervalued property and have enough capital, you can also get into a contract and sell it in the short term to gain decent profits. You can even create an online portal that will help you manage both parties.

3. Investing in Mortgage Notes

As per Mohsen Motamedian, you need to beat inflation to stay relevant in the market. To earn better interest rates, Max Motamedian also recommends exploring mortgage notes. While investing in real estate using mortgage notes, you must always look at the quality of assets. Avoid non-performing assets even if they promise you a higher return. They can be very risky, and you would need to decide between ramping up the collection of mortgages or foreclosing the property. Both can be time consuming tasks. So, you need to assess the quality of assets underlying mortgage notes closely, and depending on that, you can make a call to invest or skip. Moreover, some great mortgage notes offer you high security, just like you get in bonds or fixed-income assets.

4. Real Estate Investment Trusts

Mohsen Motamedian also receives requests from people who don't have the market knowledge required to make money in real estate. If such people try and invest with proper research, they can lose. So, what is the right way to invest in real estate for such people? Max Motamedian recommends investing in real estate investment trusts or mutual funds with exposure to real estate. Here, a trust or a fund manager will use your money to buy real estate and make money using your funds. REITs are even traded on the exchange, and regulators monitor them. REIT is a solid investment that can yield regular income. Moreover, you don't have to worry about managing the rentals yourself. Here, knowledgeable fund managers will take care of your money. Since they are traded on an exchange, liquidity is not a problem either. Mohsen Motamedian suggests exploring such options for gains as well.

5. Commercial Lease or Holiday Rentals

The residential rental is always going to be lower than the commercial rentals. You can buy commercial real estate and look for rental income in such a case. You can even divide a big space into smaller commercial set-ups. This can help you earn rental income, which you wait for the appreciation of the property rates. As per Max Motamedian, you can earn a higher income if you use your residential property for Airbnb or holiday rentals. However, the risk with holiday rentals & Airbnb is that the income can be seasonal depending on where you live. Moreover, you would need additional staff to manage your property. Moreover, your capital will be stuck for a long time if you try to make money using this method. However, on a positive note, a commercial lease can be a steady source of income for you.

Conclusion

These are some of the ways that Mohsen Motamedian recommends so that you can make money from real estate. You should always look at the documentation and verify it before getting into a deal. When you start any such investment, you must also understand your risk appetite, which would help you make a better decision. Also, multiple factors would impact your strategy while investing in real estate. This includes inflation, state, income levels, appreciation, and economics.