An important part of learning how to invest in real estate is figuring out what type of investment property to go after. There are many choices. The investor can buy duplexes, condos, apartment buildings, or even houses - and that is just the beginning. He/she can buy lots and build investment property or buy lots and rent them to renters who then build on them. They can make “in really good shape” a part of his/her research criteria, or he/she can look for a property that seems to be in rougher shape than it actually is, in order to get a good price. He/she can hunt for owners who are facing foreclosure with the hope that he/she locates someone who’s hoping to put his/her property out of his/her mind because they would really like to get rid of it.

The possibilities are many. The question is, which property is the right property for you?

But in the end, the right property for you is the one that will make the most while costing the least amount to get up to speed and run. Getting a property up to speed may involve renovation to bring a building up to code – installing up-to-date appliances and so on. It might involve a fresh coat of paint, or even evicting some undesirable tenants. What the potential new owner has to determine is, if the building's problems are fixable.

For instance, in his book “The ABCs of Investing,” Ken McElroy writes about an investor who purchased a building without even viewing the site, and found himself saddled with some tenants who were not just bad. These people were dangerous. The investment property was in a poor part of town where the owner should never have bought a property. By the time he got around to contracting Ken’s property management company, he had lost a great deal of potential income due to over due rental payments.

McElroy's team repaired as much as they could. They got rid of the delinquent tenants and hired security for the building, but they couldn’t change the quality of the neighborhood. The property would never be one that renters with other choices would choose to inhabit, simply based on its location. This property would never get the rent that it would have if it just had been situated somewhere else. Most of the building's issues were simply un-repairable.

The well known adage, “Location, location, location” is very influential for a reason. A property’s Location might be the single biggest factor the real estate investor should think about when checking out potential Minnesota homes to invest in.

Aside from simple viability, the investor must consider how he/she wants to go about handling their investments. McElroy advises investors to hire a property management firm for the experience and to free the real estate investor to look for more investments, but some owners just like a more hands-on approach. This kind of person might want to think about buying something that is little enough to take care of on his/her own. Some investors are uncomfortable having partners or investors and will be restricted by that too. In that case, less expensive and smaller is usually the best option for them.

In the end, Mr. McElroy also recommends investors not assume that he/she should start small. If they have learned enough to invest in the first place, he/she can learn how to work with OPM (other peoples’ money). He/she should consider, however, what they are capable of - or what he/she would regard as the easiest way to move forward. The possibilities are, after all, nearly endless.