Real Estate Investing
Real estate investing is an ideal investment, but the umbrella of real estate investing contains many different ways to make money (i.e. strategies). As a new investor, these numerous choices can be overwhelming, but our highly experienced Realty Exchange Agents are here to help!
Over the next couple of months we will discuss 15 different real estate investment strategies. These strategies will give you a better idea of how to make money in real estate investing.
And hopefully, one or more of these strategies will be a good fit for you. If so, this blog and one of our Realty Exchange agents, can provide the perfect starting point for your own real estate investing journey.
Now let’s get started!
You could look at real estate investing and wealth building as climbing a mountain. And of course, you are the courageous mountain climber!
The peak of the mountain is like your financial and life goals. And there are numerous milestones (goals) along the way.
Strategies are like plans for how to climb up the mountain in the first place. They are the routes that will take you towards the peak in the fastest AND safest manner.
And tactics are like the climbing tools (ropes, ladders, binoculars, etc) that help you actually climb up those routes.
There are many articles on real estate investing tactics, including analyzing your market, finding good deals, running the numbers, seller financing, negotiation techniques, and more.
But too many real estate investors get caught up in tactics without clarity on why they are using the tactics in the first place, and that is where our agents can help! One of our many real estate investment specialist are here to help you understand each of these various strategies and help you pick the one that works best for you. Getting good at tactics without a strategy can simply make you better at hiking right off financial cliffs!
So I first recommend getting clear on basic real estate investing goals, like financial independence or a certain number of free and clear rental properties. Then get clear on one or two strategies that you like. After that, all of the tactics you learn will become much more useful.
Now let’s take a look at the real estate investing strategies themselves.
To make them easier to understand, I’ve divided each of these strategies into groups based on how they’re used. These groups include:
- Business strategies
- Starter strategies
- Wealth building strategies
- Debt strategies
- Passive strategies
Each month I will unpack and briefly explain each of these 5 categories. When possible, I’ll provide links to other articles and resources to help you use each of these strategies if you’re interested.
More businesses than investments, these strategies can generate income and replace your job. Many our own agents supplement their real estate income with their own investment properties! But BEWARE: you must be prepared to invest the upfront time and effort of a business start-up in order to make them work.
The Fix-and-Flip strategy is the business of finding properties that need work, doing the repairs, and reselling them at top price for a profit. If you’ve ever watched the flipping shows on HGTV, this is what they do!
Many people use this real estate investment strategy in order to pay the bills and generate cash savings for future investments. It was not always easy, but the beautifully finished houses and the sometimes-large chunks of cash were rewarding. If this is a route you think you might want to pursue, one of our agents can go through the expense reports and cap rates with you in order to see a properties potential income.
My favorite resources on this strategy are The Book on Flipping Houses and The Book on Estimating Rehab Costs by my friend J Scott.
Wholesaling is the business of finding good deals on investment properties and then reselling them quickly for a small mark up. The crux of this business is being good at marketing and negotiating to find those good deals; which can be tricky. But our agents are very experienced in this negotiation tactic and know exactly what to look for when picking a wholesale property.
If you’re good at sales, you’ll like wholesaling. But if the idea of sales makes you cringe, I’d look for a different strategy. However, you can also consider a strategy called “bird-dogging”. Essentially, this means that you hunt down deals for other, more experienced investors and get paid when a deal you found them goes through. If you are brand new to investing, this is a great way to get a mentor and gain some experience before diving in head first
Stay tuned! In our next blog we will be looking at the different type of Starter Strategies!
However, if you have question before then, please don’t hesitate to reach out to us and we will connect you with one of our Realty Exchange Investment Specialists at 314-647-2220.