Allow me to first explain the offline real estate market. By offline real estate market, I mean residential homes, apartment buildings, raw land and commercial office buildings … in other words, the physical world of real estate.

Developing business opportunities in the offline real estate market made a lot of people rich, but it also decimated a generation. If you had the good fortune of “buying low and selling high”, you made out like a bandit. However, like stocks, real estate business development is not for the “un-initiated”, nor is it for anyone who doesn’t do their homework. And, even if you do your homework, there are a lot of bad deals and crooked people out there.

Offline real estate development requires an understanding of demographics, local markets, finance, and much, much more. In addition, it requires plenty of money, especially these days, to finance down payments, mortgages, insurance and taxes. It also requires looking at the big picture. It’s all great and wonderful to think about the upside, but what about the downside? In other words, how can you get burned?

Let’s explore an example. Suppose a crooked real estate agent brings you a deal that just looks tremendous on paper. It only requires an investment of a few thousand or perhaps a few hundred thousand in order to make millions. The developer has a great track record and wants to bring low cost housing to people who need it. In fact, the real estate agent believes so much in the deal that he/she has also invested in the deal.

Keep in mind the old adage that if it seems too good to be true, it probably is. There are so many scam artists in the world of offline real estate. And, the biggest problem of all is that the stakes are very high, indeed. You can lose thousands, if not hundreds of thousands or your life savings in offline real estate business development. As a tip, one good tool to check for scam artists, like crooked developers is www.ripoffreport.com.

Contrast OFFLINE real estate business development with ONLINE real estate business development. What is this you ask? It’s the world of building businesses leveraging the Internet.

For example, buying and registering a domain name is analogous to buying a piece of raw land in the physical world. Creating a website, then, is analogous to building a house on that piece of physical land. And, adding content (images, text, video, etc.) on your website is like adorning your physical home with furniture, pictures and such.

How is business development executed in the online real estate market … by creating value for your online property. Let’s take an example. When www.PartyPoker.com first launched, it was merely a website for like minded people to pass the time playing poker. Today, it is the #1 gaming site on the Internet, as tracked by www.Alexa.com.

How did Party Poker become numero uno … through community and social proof. They built the best poker site, invited people, friends of friends and affiliates. How do they make money … through advertising and the cultivation of their subscriber base.

Compared to the cost of offline real estate, acquiring, building and maintaining online real estate is peanuts. Yet, the rewards can outstrip those of offline real estate by a thousand fold, if not more. One real life example is the sale of YouTube to Google for $1.65 Billion in 2006.

There are many more examples of online real estate business development opportunities. The key is to pick a niche, understand your demographics, put down stakes, build your dream site, and invite your flock. Sound familiar?

Read more articles from David Chan.

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