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A successful Real Estate investor is someone who is continually profitable and does not deviate from sound mechanics. They use formulas and specific criterion. They often ignore the market trends and all the hype because successful Real Estate investors make money no matter what the market is doing.
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So, why does the news continue to portray Real Estate investors who are in over their heads? The reality is that these reports are not really about true Real Estate investors rather they are about Real Estate Speculators.
And the differences are major.
What the news really should be reporting on are of all of the people who bought brand new homes from builders knowing (speculating) that they would be able to sell or flip ?it? (?it? meaning the contract) before settlement? Maybe you are you are one of them? Or know someone who is.
While some real estate speculators were able to make quick and easy money this way, many of them are now stuck with houses they never planned on owning in the first place.
Now some investors who put yet to be built homes under contract simply walked away from the contract even though that often meant forfeiting their sometimes hefty and almost always non-refundable deposits. This is why many home builders who have large inventories are being forced to offer purchase incentives in order to try and sell off some of it. On the other hand, many of the speculators who did go through with the purchase are now facing foreclosure on these now vacant and not ever lived in brand new homes.
The bottom line is that speculating is not investing. Speculating is gambling, at best, where the current market absolutely can and does make a huge difference.
Speculating investors who mistimed the market are finding that it is taking much longer than they planned to resell their property. Some who bought with the idea of renting for a few years to allow some natural appreciation are seeing their adjustable rate mortgages resetting to levels incompatible with the local rental market.
Many want to be Real Estate investors watched too many infomercials about getting rich in real estate overnight. They watched too many house flipping TV shows and went into the process of investing with insufficient knowledge and capital.
While true Real Estate investors will ride out the current market conditions virtually unscathed, the Real Estate Speculators are struggling to get out with shirts still on their back.
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Source: http://realestateinvestingfacts.com/blog/6463/real-estate-investor-real-estate-speculator/
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