<p><b>Real estate investing</b> involves the purchase, ownership, management, rental and/or sale of <a title="Real estate" href="https://en.wikipedia.org/wiki/Real_estate">real estate</a> for <a title="Profit (accounting)" href="https://en.wikipedia.org/wiki/Profit_(accounting)">profit</a>. Improvement of realty property as part of a real estate <a title="Investment" href="https://en.wikipedia.org/wiki/Investment">investment</a> strategy is generally considered to be a sub-specialty of real estate investing called <a title="Real estate development" href="https://en.wikipedia.org/wiki/Real_estate_development">real estate development</a>. Real estate is an <a title="Asset" href="https://en.wikipedia.org/wiki/Asset">asset</a> form with limited <a class="mw-redirect" title="Liquidity" href="https://en.wikipedia.org/wiki/Liquidity">liquidity</a> relative to other investments, it is also <a title="Capital (economics)" href="https://en.wikipedia.org/wiki/Capital_(economics)">capital</a> intensive (although capital may be gained through <a title="Mortgage loan" href="https://en.wikipedia.org/wiki/Mortgage_loan">mortgage</a> <a title="Leverage (finance)" href="https://en.wikipedia.org/wiki/Leverage_(finance)">leverage</a>) and is highly <a title="Cash flow" href="https://en.wikipedia.org/wiki/Cash_flow">cash flow </a>dependent. If these factors are not well understood and managed by the investor, real estate becomes a <a title="Risk" href="https://en.wikipedia.org/wiki/Risk">risky</a> investment.</p>

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<p>Real estate&nbsp;<a href="https://en.wikipedia.org/wiki/Market_(economics)">markets</a>&nbsp;in most countries are not as organized or&nbsp;<a href="https://en.wikipedia.org/wiki/Economic_efficiency">efficient</a>&nbsp;as markets for other, more liquid investment instruments. Individual properties are unique to themselves and not directly interchangeable, which presents a major challenge to an investor seeking to evaluate prices and investment opportunities. For this reason, locating properties in which to invest can involve substantial work and competition among investors to purchase individual properties may be highly variable depending on knowledge of availability.&nbsp;<a href="https://en.wikipedia.org/wiki/Information_asymmetry">Information asymmetries</a>&nbsp;are commonplace in real estate markets. This increases&nbsp;<a href="https://en.wikipedia.org/wiki/Real_estate_transaction">transactional</a>&nbsp;risk, but also provides many opportunities for investors to obtain properties at bargain prices.&nbsp;<a href="https://en.wikipedia.org/wiki/Real_estate_entrepreneur">Real estate entrepreneurs</a>&nbsp;typically use a variety of&nbsp;<a href="https://en.wikipedia.org/wiki/Real_estate_appraisal">appraisal</a>&nbsp;techniques to determine the value of properties prior to purchase.</p>
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<p>Typical sources of investment properties include:</p>
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<ul><li>Market listings (through a&nbsp;<a href="https://en.wikipedia.org/wiki/Multiple_Listing_Service">Multiple Listing Service</a>&nbsp;or&nbsp;<a href="https://en.wikipedia.org/wiki/Commercial_Information_Exchange">Commercial Information Exchange</a>)</li><li><a href="https://en.wikipedia.org/wiki/Real_estate_agent">Real estate agents</a>&nbsp;and&nbsp;<a href="https://en.wikipedia.org/wiki/Real_estate_broker">Real estate brokers</a></li><li>Banks (such as bank&nbsp;<a href="https://en.wikipedia.org/wiki/Real_estate_owned">real estate owned</a>&nbsp;departments for REO's and short sales)</li><li>Government entities (such as Fannie Mae, Freddie Mac and other government agencies)</li><li>Public&nbsp;<a href="https://en.wikipedia.org/wiki/Auction">auction</a>&nbsp;(<a href="https://en.wikipedia.org/wiki/Foreclosure">foreclosure</a>&nbsp;sales,&nbsp;<a href="https://en.wikipedia.org/wiki/Estate_(law)">estate</a>&nbsp;sales, etc.)</li><li>Private sales (transactions for sale by owner&nbsp;<a href="https://en.wikipedia.org/wiki/For_sale_by_owner">For sale by owner</a>)</li><li>Real estate wholesalers and investors (<a href="https://en.wikipedia.org/wiki/Flipping">flipping</a>)</li></ul>
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