hey what's up everybody this is Sam Kwak here one of the Kwak brothers real
estate investor and in this video we can go and talk about the topic of how to
make money in real estate for the year of 2020 alright so getting right into it
there are many ways to make money in real estate so for example my brother
and I got started about 6 years ago in real estate by buying rental properties
and fixing and flipping homes fast forward my brother and I were able
to acquire over 80 rental properties meaning we have over 80 families paying
us rent every single month so all in all I've distilled down five top hyper
profitable ways to make money in real estate just getting started and how you
can also participate and make some money through real estate to kick things off
the fastest way to make money in real estate is to click the like button on
this video as it will help us out with our YouTube algorithm but seriously
though if you guys can help us out by blowing up this video we can go and make
more video about real estate and how to make money okay so Ontario countdown
number five in our countdown on how to make money in real estate is to become a
real estate agent now this is probably the most obvious the mainstream way to
start making money in real estate now by becoming a roasted agent what it means
is that you're now representing potential buyers and potential sellers
in the matchmaking process so let's say you know Joe here wants to sell this
house but he doesn't have a whole lot of relationships with potential people that
may want to buy Joe's house so as a real estate agent part of my business is to
go out and represent Joe and look for buyers potential buyers that would be
interested in buying Joe's house so that's a business that I'm in or advise
first up let's say John here wants to buy a new home for his family and my job
is a roasted agent as John's agent would to go to go look for properties that
would suit John's needs so essentially you are a matchmaker
between a buyer and a seller and when there's a successful transaction you can
earn commission and as a new real estate agent you can
earn a commission between 1 and 3 percent sometimes even more depending on
your brokerage and there are different brokerage rules as far as how the
Commission's paid out the drawback to becoming your roasted agent is it could
quickly become another job you may have to work eight hours a day you know your
Luke doing some research on the market you're fishing out leads for sellers and
buyers and and it could take up to four months to close your first transaction
and earn your commission so it does require a little patience and also you
do need to take an exam as well as a credit course to be licensed to become a
real estate agent now the pro obviously is you don't have to have a whole lot of
money to get started unlike fixing and flipping or buying rental properties
though here in the pop Werther's we do teach away where you can buy rental
properties and fix and flip houses without having to use your own money or
credit we'll get to that more deeply which reminds me to say go ahead and
subscribe to our youtube channel as we will have more videos about other real
estate topics in our channel so that was number five in our countdown is to
become a real estate agent on to our number four to come down of how to make
money in real estate for 2020 is to become a wholesaler
now there's wholesaling and assigning contracts and a lot of times individuals
may interchange those terms but in fact wholesaling and assigning contracts can
be two very different things though it may share similar goals now
wholesaling to give you a little background and where it came from and
what it is back in the day there were wealthy investors people who buy home
they would buy homes in bulk so they would buy twenty thirty houses all at
the same time for a very cheap price now these investors didn't have all the
resources to fix them flip individually all these 20 to 30 homes so what would
happen is investors would keep ten properties to it some flip problem fix
and flip them for a very high profit and they would wholesale the other twenty
properties for a larger price for each of the property so it's kind of like
going to like Walmart and buying a 12-pack of soda or pop and then selling
them one off individually for a higher price
so think about buying twelve versus going to a vending machine to buy
a can a can of coke or right right so vending machine obviously costs a bit
more per can versus buying a 12-pack so think of that as as traditional organic
form of whole sign now there's a sign a contract which is live at a different
form of quote-unquote wholesaling what this involves is basically you're
looking to buy a home putting it under contract saying hey I'm gonna buy this
home eventually with a certain closing date and then what's happening is that
I'm gonna go ahead and turn around and sell my rights to this contract to
another individual that would be interested in buying this home so let's
say for example I put house a on their contract for $100,000 and ultimately
what I would do is hey John over there down the street is interested in the
same house a so I would give the option the rights to execute on his contract -
John for let's say of ten thousand dollar fee so all in all John has to
come up with hundred ten thousand dollars ten thousand dollar that goes to
me in my pocket my feet and the other hundred thousand dollars to actually go
and buy the home so this is a signing contract essentially you're getting dibs
on the best deal around in town and then ultimately giving it to another investor
who maybe does have the money to buy it all you're doing is is charging a little
bit of fee and that's how you can make money in a signing contract so that's
number four in our countdown now I will give you guys a little bit of
disclaimer of assigning contracts and wholesaling please do read up on law and
rules about wholesaling because states like mine here in Illinois we do have
restrictions as to how many times you can assign contracts per year until you
have to be a licensed real estate agent so make sure you read up on your state
rules talk to professional talk to a lawyer and I would HIGHLY advise that
you guys go ahead do some more research before you started wholesaling because
there are some rules that you do have to be aware with alright now on to number
three in our countdown of how to make money in real estate is the good
old-fashioned fix and flip now this has been popularized by many TV shows like
you know flipped his house or HD TV where you see individuals buying a
torn down home or very worn out houses fixing them and selling it for a larger
profit now one thing that I have to tell you guys is that these TV shows tend to
make the fix and flip business easier than it looks it's actually quite harder
than what the TV makes it look like you have to have some exceptional background
or at least the knowledge of construction you have to have knowledge
of your local area neighborhood what certain homes are going for in terms of
prices and you have to have a good relationship with skilled contractors as
well as real estate agents people who are gonna be vital in your business so
fixin flip is a great way to make money you can have a potential profit of
lowest $30,000 or even up to as 1 million dollars so it's a great way to
make profit and like I mentioned before you don't have to have your own money
or credits to flip homes so if you guys are interested in that conversation
comment down below if you guys want to see a video about how to start fixing
and flipping homes without using your own money or credit if I get enough
likes and comments I'll go ahead and make a separate video just on that topic
now I do need to stress the fact that where you make the money on fixing and
flipping homes is not on the selling side but how well you buy the home you
want to buy houses obviously that need in repair but you
also want them to come cheap so that you do have a little bit of wiggle room a
margin a profit margin so that you can make money I seen a lot of individuals
especially beginners make the mistake of buying just a random house making a look
you know a little bit nicer and then try to sell for a higher price but
unfortunately they didn't have the knowledge of the market the neighborhood
the comps to where they fully understand didn't fully understand that homes don't
sell in the price that they were looking to sell afford so this is where having
the special knowledge of the neighborhood the market is going to come
to play my brother and I are big fan of education so you don't even have to sign
up for our course go sign up for some sort of mix and flip course learn and
take you seriously don't just go off the web and Google search because there's a
lot of knowledge and education and way all right so until number two in the
countdown of how to make money in real estate is buy and hold and simply known
as fine rental properties now this is honestly my favorite way of getting
started in real estate merely because once you buy a rental property get it
all set up have a good management process in play you can essentially turn
this rental business into a very passive business meaning all we have to do is
just collect rent and thankfully with the advancement of technology of
internet all we have to do is just collect rent through the internet and
you don't have to do a whole lot of time consumption activity of physically going
to rental houses to collect rent now much like fix and flip I know this may
seem like an easy idea but again you do need some education and some knowledge
as to what homes are going for in terms of rent you need to know you need to
know how to manage properties or at least manage the property managers so
there is a process of education that you have to go through to become somewhat
stable in having your business in rental properties so just picture owning five
rental properties that pay you $1000 a month and all you have to do is just
collect rent and make sure there's you know the repairs are being taken care of
the maintenance is taken care of and all these can be done if you have the right
team in place so you got to have your handyman or handy woman you gotta have
your plumber you gotta have your lawyer that can handle addictions if that you
know it will happen unfortunately so you're gonna have all these individuals
in your team if done well it can truly give you extra income without having to
sacrifice a whole lot of your time alright so before we get to the number
one in the countdown of how to make money in real estate for 2020 go ahead
and leave a comment guys what do you guys think is the number one so go ahead
and pause the video right now leave your comments below what do you think is the
number one way to make money in real estate and no it's not it doesn't have
to do with the the previous four this is exclusively different so go ahead and
comment down below we'd love to hear you guys and your ideas alright number
wanted to countdown of how to make money in real estate drumroll please
is to become a bank I know you guys are scratching your head am i hold on that
seems like a very daunting task well it is I mean you don't have to be one of
those big banks right in New York Wall Street but you can be a mini bank a
miniature version of the bank and what I mean by that is you can lend money to
other individuals getting started in real estate so if let's say a friend of
yours want to start fixing and flipping homes or want to buy a rental property
imagine being that person's bank you know lending money to that person and
ultimately all we have to do is collect the check right collect interest so
think about this guys who are the richest organization in the world the
bank's right they make money literally taking your money as a deposit and then
getting a loan from the Federal Reserve the central bank and lending it back out
to the consumers at a marginal rate so honestly banks are the most wealthiest
organization around the world now of course again you don't have to be a
grandiose Wall Street bank you can start with the other four methods of making
money in real estate that we talked about and incline yourself up to where
you have enough cash deserve to be able to be a lender a private lender to other
individuals wanting to get into real estate that way you take yourself out of
the risk of managing properties managing tenants the risk of failing a fix and
flip project because all you're doing is just collecting interest and collecting
your money banking on your own money and letting your money do your work now
there is an alternative of becoming a bank and that is to buy promissory notes
now what promissory notes are simply you buy loans that banks have for sale and
now this might be a new concept for you guys so let me go to break it down in a
very simple turn let's say your local bank right
ABC bank lend it out hundred thousand dollars to John here who bought a home
recently so John is paying back five hundred thousand dollars in form of a
mortgage and John is paying monthly payments so now ABC Bank instead of
waiting 30 or 20 years to collect on John's payment the bank could choose to
sell that loan to individual like me and you so that we essentially
become the bank for John so let's say the bank ABC right decides to sell their
hundred thousand dollars no they typically like to sell it on what's
called a discount rate now I'm not gonna go into much of the detail but they're
gonna go and sell this 100 thousand dollar loan for let's say eighty five
thousand dollars so instead of waiting 30 years to collect a hundred thousand
dollars plus the interest the bank is deciding to opt out and saying hey you
know what we want cash today so instead of waiting 30 years to collect one
hundred thousand dollars plus interest we'll just sell this loan to another
individual for eighty five thousand dollars now where we win as a buyer of
these notes is that we would now essentially buy a hundred thousand
dollar note through only eighty five thousand dollars plus we get to collect
the interest on that one hundred thousand dollars that John is owing us
instead of Bank ABC so this is a very common way for a lot of individuals to
invest their money is to simply buy promissory notes that the banks are
cheesed in to sell to individuals like us now again the pro to this method of
making money in real estate is that you don't have to deal with tenants you
don't have to deal with the fix and flood project you know what to deal with
the construction you don't have to manage the process day-to-day this is
probably the least time consuming way to make money in real estate but again it
does require money and it does require some skill and knowledge in the world of
banking but eventually I encourage all of you guys to eventually become your
own lender so that you take yourself out of the game ultimately sit back relax
collect the Paycheck like interest and live your life so that pretty much sums
up to five type of profitable ways to make money in real estate for the year
of 2020 tell me guys which strategy do you like the best and which strategy are
you choosing to go with leave it down below in the comment section and as
always if you felt like this video was fun educational valuable go ahead and
like this video and subscribe to our YouTube channel for more real estate
related videos thank you so much for tuning in and I'll see you guys in
another