If you have the heart and soul of a gambler or love extreme sports and activities such as skydiving or bungee jumping then you may be the ideal candidate for pre-construction real estate investing. Pre-construction profits are often among the highest in the industry. At the same time so are the risks. You will find the greatest highs and lows that can be found in the field of real estate investing lie beneath the umbrella of pre-construction profits and many of the big names we know so well in the real estate investing field have made much of their fortunes through speculation and pre-construction sales.

Before I go any further, one word of caution should be spoken. While the potential for profits in this particular corner of the real estate market are unconventionally high the risks are also abundant. This is speculative real estate at its very best and as we have all learned in the past, when the bubble bursts in a specific market those who have the most invested are the ones who often loose most heavily.

As far as what pre-construction real estate is there are a few interpretations. The first is also the most obvious. You are buying real estate at some point before construction is complete. In hot markets you will often need to purchase the units before ground has broken on the project in order to get the lowest price for your investment and highest potential pay off for your pockets. Once you've purchased the unit or units you plan to sell you then begin seeking buyers for those units. In markets that are on fire like some Vegas suburbs and big retirement and vacation cities along the Florida coastline the same property is not exactly uncommon for a property to change hands and have several owners before the unit is complete. Each one will take a little something home from the table for their efforts with those who get in earliest often taking the largest piece of the pie home with them.

You may be wondering why this occurs and the answer really is simple. When the contractors attempt to get funding for their buildings in these large complexes they often need to have a certain percentage of the units "pre sold" in order to convince the banks that there is an adequate market and to garner some of the revenue that is needed to get the venture up and running, so to speak. So real estate investors buy these units at rock bottom prices because essentially they are paying for the idea of the unit (which hasn't at this time been built and isn't yet approved to be built in many cases) rather than a brick and mortar property. As the project draws closer to completion, particularly in markets where real estate is in high demand, the value of the property rises dramatically ending in ridiculous profits for those who have managed to hang on.

The risks however are many. There are any number of things that can go wrong on a project such as this not the least of which is that the demand for housing will be met before the unit is actually built. This has happened and continues to happen. Also recessions, business closings, economies collapsing, and tragedies in the vicinity can occur before the property is complete leaving everyone who has invested heavily in the project holding a little bit of the bag and loosing their profits and, quite possibly, their investment. These projects generally take a great deal of time to complete which makes the risks that much greater and the anticipation of these events a little more difficult to map out ahead of time. If you can manage to make it through however many investors see more than a one hundred per cent return on their investment making it a popular type of investment among many despite the rather large risks involved.

There are all kinds of avenues available to those that are considering real estate as a likely method of investing in the future. And why on earth shouldn't you? This is one way that millionaires around the world will agree to build a massive fortune quickly. At the same time, real estate can be a very risky venture for business so you need to have a few more stable methods of bringing in money in order to have a truly diverse portfolio and a better security system for your financial future. Even within the world of real estate investment you will find different manners of investing that each bear different risks.

Commercial real estate is a good place to begin because it is relatively secure when compared to some of the other forms of real estate investing. The drawback with commercial real estate is that it requires a massive investment to begin with. This is something that many real estate investors do not even consider until they have built a sizable portfolio and have plenty of money to risk. It is stable because most businesses that lease from you will want to lease on a long-term basis. This means that when you get clients, businesses prefer to stay in one location as long as possible because it's bad for business in most cases to constantly be on the move, they tend to stay a while.

House flipping. This is becoming a popular form of real estate investing and many people have discovered that this is also a great way to make or spend money very quickly. This is a high-risk venture to say the least but the rewards are equally high when a flip goes well. You will have to decide for yourself if you are willing to take the gamble as house flips are part skill and part luck.

Residential rental properties. Becoming a landlord, while perhaps not as glitzy as owning business properties throughout the city or flipping fabulous properties for instant profits is a great way to work yourself into a rather comfortable retirement. This is a long-term type of real estate investment but the payoffs can be rewarding when all is said and done. For the cautious real estate investor this is a worthy type of real estate investment to pursue.

Pre-construction real estate. Pre-Construction profits are even riskier than house flipping in many instances, particularly as it has become so popular in recent years. The trick with this kind of investment is finding the right property in the right market. If you can get in a city that is about to have a serious housing shortage or is in the beginning stages of a housing shortage (such as a few desert and coastal communities have experienced in recent years) you stand to make quite a fortune for yourself. The problem is that this field is highly speculative and very competitive.

Lease or rent to own purchases can often bring better profits. For many real estate owners this is preferable to straight up renting for many reasons. First of all, those who hope to own their homes are much more likely to take better care of their homes than those who are just renting. This means that even if for some reason they decide to move elsewhere and do not complete the purchase you are less likely to need extensive repairs before you can move along to the next client. You can charge a little more than rent applying a certain amount of the monthly rent to the purchase price or down payment of the home, and you can actually be helping a family that might have hit a trouble spot along the way to achieve the American dream of home ownership.

Real estate investing is a great way to build great fortunes. You must decide where you want to begin your journey into this lucrative field however. Remember that once you've begun your real estate investment career it is a good idea to utilize more than one type of investment for the sake of diversity and spreading the risks, as this is a volatile market at best.