What is a reasonable profit number for each real estate deal?

Real estate deals are not just selling property, it can be about flipping houses or even refinancing too. You can find a real estate deal through two main methods, which include online methods and by through person interaction. To start the real estate dealings, you don’t need a lot of capital to make money over it. What you need is a good know-how and the tactics to sell the property.

There are two ways to make cash for your real estate deals. One way is to buy the property and hold it. This is a technique to generate passive income through positive cashflows. A second way to do the same thing is by flipping the contracts, which is similar to adding value to the deal.

Well if you want to know that what is the reasonable profit number for each real estate deal, then there is no one specific answer to that. The profit number depends on the prices of the property you are dealing with, its location, conditions and the costs that you incur. For a good profit number, your income should exceed your expenses.

There are several strategies that you can apply to make a decent profit over the real estate deals:

  • Location means a lot when it comes to real estate. Here you buy a property by down payment so you have the cash in hand. Then you hold the property for the long-term and earn some positive cashflows through residential rentals. The rule for the pricing of rentals is determined by looking at the price as a factor of 100 times the monthly rent. This is the easiest way to know about your investment deal too. Holding the property is a great idea until unless your client wants to completely sell off his property due to personal reasons.
  • The flip market is climbing. The trend of interior and renovations has brought the market to the flipping of houses and real estate fashion. One of the property dealers, Matt Larson got an advice on the flipping of houses, “go after the ugliest homes in the nicest neighborhoods.” This illustrates that you got a room to make a lot of profit by earning the after-repair value and selling the deal by realizing the potential value of the site and house.
  • Another way to make quick profits without investing on the long-term renovations and flipping contracts is by making short sales. For this scenario, you have to make sure that the all members of the dealing party should agree to sell off the real estate completely for less numbers than owed on the existing mortgage. These short sales take time and are riskier, but worth it. Ten to hundreds of thousands of returns can be expected on these short sales.
  • The most lucrative source of income in the real estate market is the commercial real estate investments. People need space for their businesses, shopping malls, offices and you can flip these properties and add value through up-gradations.

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