REAL ESTATE INVESTING STRATEGIES

Which strategy is for you?

When you're determining what you want out of a career in real estate investing, you need to be aware of the responsibilities associated with each strategy. Consider factors such as your short and long terms
goals, as well as your current situation, including your budget and time constraints. The key to determining a real estate strategy is to first comprehend what you want to achieve and then align that desired
goal with the right business strategy to achieve it. Here are some examples:

WHOLESALING REHABBING BUY & HOLD RETAILING

Flip & Sell Fix & Flip or Hold Fix & Hold Fix & Flip & Sell
Finding good deals on investment properties, Finding and purchasing run-down properties or those that Finding run-down properties or those that need some work, Finding properties that need repairs, adding value by
DEFINITION getting them under contract and then need minimal cosmetic repairs, renovating them and then repairing them to a rentable condition, then renting the renovating them and then reselling them at a top price for a
assigning the contract for a quick fee selling for a pro t properties out to tenants and simply collecting the rents major pro t

TYPICAL Active, short-term strategy Active, short-term strategy Active, Long-term strategy Active, Mid-term strategy
Take only weeks to few months Take weeks to several months to rehab and resell Take weeks to several months to rehab Take weeks to several months to rehab and resell
TIMEFRAME

Best entry way to get started in real

estate investing Great passive income opportunity - lots of money in the
Typically results in the highest pro t margins
Quick pro ts long run
High pro t margins on a single deal Ties up capital for a shorter time period
Little to no capital needed Can grow your real estate investment portfolio
Can make a signi cant amount of money very quickly Highly localized
BENEFITS Minimal personal risk
You keep more control over the entire process of
Monthly rental income and properties can appreciate
No need to deal with tenants and their endless
Can do it part-time or full-time The property pays for itself through rental income
rehabbing a property demands
No involvement in doing rehab or Tax bene ts, such as depreciation
Can offer quick returns
renovations Many tax-deductible associated expenses
No long-term commitment required

Have to act quickly to get a deal done
Have to have a network of buyers
DRAWBACKS Must be good at marketing and
negotiating to source good deals
Need funding upfront for the purchase and repair
cost
Must be actively involved in the project, repairs and
renovation
Endure nancing costs and carrying costs such as
utilities, insurance, taxes, HOA fees, buying costs,
and selling costs
Need to get in and out of the property as quickly as
possible, to avoid holding costs
Longer it takes to ip the property, the more monthly
expenses
The longer you hold the property, the less money you
make because you’re paying a mortgage without
bringing in any income
Requires long-term commitment
You need a reliable source of nancing to purchase the
property (conventional loan, personal funds, partner,
etc)
Requires research about the market, local
neighborhood, what properties are appealing to your
target audience, property expenses
Capital intensive —you need lots of cash (fund upfront
maintenance, cover vacant months, etc)
You become a landlord having to manage the property
(or hire property management company)
Can take 30–45 days to close on a property
Potentially damaged property from tenants
Can lose monthly income if property is vacant
Requires a deeper market knowledge and real estate
experience
Transaction time can take months to close on purchase
and resale
Capital intensive
Higher-risk from many angles (market change risk,
underestimating costs, unexpected problems)
High transaction costs
Hard to do long distance
Need a strong real estate network—access to an
investor-friendly agent, contractors, plumbers,
electricians, etc)

ANYTIME! (The best strategy Best when the market is on an upswing When home prices are high to recoup any capital spent May seem challenging for new investors just starting
WHEN TO USE whether the market is up or down!) During the recovery phase of a recession acquiring the property out

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