If you're reading this article, you may be serious about building wealth through real estate or you may just want to explore the core concepts further. Regardless, we thank you for visiting OfferMarket, and we hope you find the ideas presented in this article to be insightful, actionable, valuable and worthy of the time you've taken from your busy day.

 

Our mission at OfferMarket is to empower you to build wealth through real estate. To do this, we provide real estate investors with [off market investment property deal flow](https://www.offermarket.us/listings), [fix & flip loans and DSCR rental loans](https://www.offermarket.us/loans), [fix & flip insurance and landlord insurance](https://www.offermarket.us/insurance), and tools and insights to build knowledge and expertise.

 

## Why invest in real estate?

 

Asking why is a powerful way to learn. These are the reasons why people invest in real estate:

 

**Income**

 

Real estate generates rental income. Whether it's a single family rental or a self-storage facility, people pay to use real estate. If the rent they pay is high enough to cover the ongoing expenses to finance, manage and maintain the property, then the property generates cash flow that can be used by its owners for any manner of activity, including buying more real estate!

 
 
**Asset appreciation**

 

Real estate values tend to go up over time. It's important to proactively protect real estate using cost effective maintenance, disciplined management and [insurance](https://www.offermarket.us/insurance).

 

**Inflation protection**

 

One important basis for valuing real estate is replacement cost. Over time, as building material and labor becomes more expensive, it becomes more expensive to build houses. Homebuilders therefore need to charge higher prices for new homes. This serves as a driver for price appreciation of existing homes. 

 

In most real estate markets, where there is not excess supply or low demand from renters, landlords have the ability to increase rent at a faster pace than inflation. Using the income approach to [valuing real estate](https://www.wallstreetoasis.com/resources/financial-modeling/real-estate-financial-analysis), as rental income increases, so too does the price an investor is willing to pay for the property. For example, if a single family home generated $1,000 per month in rent in 2010 and $1,500 per month in rent in 2020. In 2010 that property may have conservatively been worth $100,000 in 2010 and $150,000 in 2020.

 

Owning real property sure beats having cash sit in a bank account, and it performs better during periods of high inflation other asset classes.

 

**Tax efficiency**

 

While the property is generating income and increasing in value, it is also depreciating. The roof may need to be replaced every 25 years, the floors may need to be replaced every 30 years, the furnace may need to be replaced every 15 years. For this reason, the IRS allows real estate investors to depreciate the value of their house (not the land value) over 27.5 years. 

 

If you are financing your investment property with a mortgage, you are racking up thousands of dollars per year in interest expense.

 

On an ongoing basis, your investment property requires maintenance. Let's say your dishwasher needs to be replaced, or your house needs to be painted. Capital improvements such as a kitchen or bathroom remodel may also be required to keep your property in good condition and optimize rental income.

 

Depreciation expense, interest expense, maintenance expense, and capital improvements offsets rental income and reduces or even eliminates taxable income.

 

If you sell real estate, you can do a 1031 like kind exchange and use the proceeds of the sale to purchase a new investment property. This allows you to defer capital gains tax indefinitely while you hold the new real estate.

 

## 4 Pillars Of Real Estate Investing

 

**1. Compounding**

 

The value of a high quality asset over time will compound. We met a gentleman who bought a 5 story brownstone in New York City for $100,000 in 1975. That property is worth over $5,000,000 today and generates over $12,000 in monthly income.

 

Compounding takes time so you need to be disciplined to hold the asset and not sell in fear when prices go down or greed when prices go up.

 

As Warren Buffett famously said "*price is what you pay, value is what you get*". Buffett's teacher, Ben Graham, once said "*In the short run, the market is a voting machine, but in the long run, it is a weighing machine*.”

 

**2. Location**

 

Location, location, location. You've heard this saying countless times. When investing in real estate, you need to truly understand the local market. Here are some things that great real estate investors consider:

 

- Population growth
- Economic development
- Major employers
- Major industries
- Median income
- Market rent
- Market rent growth
- Poverty rate
- Housing inventory
- Developable land
- Developer activity
- Historical home price appreciation
- Owner occupied housing rate
- Crime
- Tax rate
- Public school ratings

 

**3. Valuation**

 

Understanding the above points will allow you to understand the risks of owning real estate in a given market. Recognizing asymmetric risk will save you from making the mistakes of buying at all or buying at the wrong price.

 

**4. Financing**

 

Like most infrastructure, real estate is highly capital intensive. Properly structuring your real estate investments will allow you to acquire real estate, optimize its cash flow, and avoid the risks of excess leverage.

 

## How Jon Gray Invests In Real Estate

 

<iframe width="560" height="315" src="https://www.youtube.com/embed/UKkykksZHOU" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>

 
 

## How Sam Zell Invests In Real Estate

 

<iframe width="560" height="315" src="https://www.youtube.com/embed/ryn5nXFEE8w" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>

Investing in real estate is an incredibly powerful way to build wealth and achieve financial independence. Learn how to invest in real estate.

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How To Invest In Real Estate | OfferMarket

How To Invest In Real Estate

Has completed at least 200 hours of appraisal education and accumulated 1,500 hours of experience. Bachelor's degree, Associated Degree with minimum of 30 credits or CLEP is required.

 

## Related terms
- [Certified General Appraiser](https://www.offermarket.us/real-estate-glossary/certified-general-appraiser)
- [Licensed Residential Appraiser](https://www.offermarket.us/real-estate-glossary/licensed-residential-appraiser)
- [Trainee Appraiser](https://www.offermarket.us/real-estate-glossary/trainee-appraiser)

A Certified Residential Appraiser has completed at least 200 hours of appraisal education and accumulated 1,500 hours of experience. Bachelor's degree, Associates Degree with minimum of 30 credits or CLEP is required.

Certified Residential Appraiser - Real Estate Glossary - OfferMarket

What is a Certified Residential Appraiser in real estate?

## How to sell house fast

 

At OfferMarket it's always [Sell My House Fast Day](https://www.offermarket.us/blog/sell-my-house-fast-day) and [We Buy Houses Day](https://www.offermarket.us/blog/we-buy-houses-day). 

 

If you need to sell your house fast in Baltimore, we want to be your trusted home sale platform. Let's meet a seller who received multiple competitive offers for his house in Baltimore, MD from OfferMarket's network of qualified buyers.

 

Neil wanted to sell his [duplex in Baltimore's Federal Hill neighborhood](https://www.offermarket.us/listings/50-E-Montgomery-St-Baltimore-MD-21230-USA). The problem was that the property was leased to tenants that he did not want to inconvenience with endless showings and distruptions. It was clear to Neil that the ideal buyer would either be a rental property investor, or a buyer willing to wait several months for the leases to expire. The buyer needed to be reliable.

 

Neil wanted to get the best possible offer but he didn't know what his property was worth as a leased rental property. He didn't want to put the property on the MLS with an agent and pay over $25,000 in commissions, or risk buyers backing out or re-negotiating after their inspection of the property. He wanted to close the sale quickly for highest possible net proceeds. As an out-of-state landlord with a busy schedule, he definitely didn't want to manage a [For Sale By Owner](https://www.offermarket.us/guides/how-to-sell-a-house-by-owner) sale. 

 

Neil carefully evaluated his options and found OfferMarket's [Sell My House Fast Baltimore, MD](https://www.offermarket.us/sell-my-house-fast/baltimore-md) overview. Intrigued by the idea of receiving multiple competitive offers, with OfferMarket charging the winning buyer a flat $5,000 service fee at closing, he filled out our [Get Offers form](https://www.offermarket.us/sell) and let OfferMarket handle it from there.

 

## Here are the stats from Neil's campaign:

 

- **Safe Showing:** 7 qualified buyers (photo ID, proof of funds)
- **Offers received:** 3
- **Winning offer:** conventional financing, AS IS, close in 23 days
- **Estimated seller savings:** $23,500

 

## From the seller:

> I have bought and sold several properties over the last 2 decades and can say without a doubt that my experience with OfferMarket was second to none. From the initial conversation to closing date, their dedication, knowledge and professionalism made all the difference. I would strongly recommend OfferMarket.

 

## From the buyer:

> As first time homebuyers my wife and I were constantly warned that we shouldn't go it without an agent. The entire OfferMarket team was extremely responsive, informative, and helpful in making sure we understood every step of the process and felt confident in the decision we were making. While purchasing a home alone is probably a bad idea, purchasing through offerMarket is not going it alone. Thank you OfferMarket!

 

Every seller has a story to tell, read our [Google Reviews](https://www.google.com/search?q=offermarket) to see if selling your house fast with OfferMarket is right for you.

 

## Sell My House Fast: Get Offers with OfferMarket 👇

Every seller has a Sell My House Fast story to tell. Meet Neil, who saved $23,500 by selling with OfferMarket.

Sell my house fast seller success stories

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Sell My House Fast Success Story Baltimore, MD  - OfferMarket Blog

Sell My House Fast Success Story: Neil From Baltimore, MD

Grow your real estate investing business with the most competitive DSCR loan product. OfferMarket also provides DSCR rental loans, bridge loans, hard money, fix & flip, rehab, ground up construction loans.

Rental Loans

#### What does PITI mean?

 

PITI stands for Principal, Interest, Taxes and Insurance. Aside from maintenance, these are the core expenses of owning a house. Typically, your monthly payment to your lender or mortgage servicer includes all of these costs.

 

For example, let's say you buy a home for $250,000 with a 5% down payment on a mortgage loan at 3% interest, 1% [PMI](https://www.offermarket.us/real-estate-glossary/pmi), 1% property tax and $1,000/month property insurance. Using our [mortgage calculator](https://www.offermarket.us/tools/mortgage-calculator), you can see that your monthly PITI would be just under $1,500.

PITI stands for mortgage principal, interest, taxes and insurance. Learn more about PITI at OfferMarket.

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