What’s the Best Real Estate Investment Strategy? [Infographic]
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A lot of people think that all great investors have a secret formula or one killer strategy that they rinse and repeat. Sadly, this could not be further from the truth. Markets are dynamic and go through booms and busts. They are affected by external factors such as the political climate, natural disasters, international conflicts etc. more than you may think.
The real estate market is no different. People get nervous when they hear things like the bubbles going to burst, but real investors know that it is just part of the cycle. They recognize that the market occasionally needs to reset itself, and they are ready for it with the appropriate real estate investment strategy.
Also, they know that there’s still money to be made during the downturn, and they already have a real estate investment strategy in place for when it comes. In fact, they have a strategy for making money for every part of the cycle, and for any occasion and situation – a strategy for when you want to exit fast, one when you want to get a regular, passive income, another one for when you don’t have a lot to invest.
One popular quote from Warren Buffet perfectly illustrates this fact: “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.”
If you happen to be new in real estate investing and are overwhelmed by this fact, what you’ll need is a solid, straightforward guide telling you exactly what to do. Fortunately, one such guide has been made by real estate veterans OfferClimb Houston, and it even comes in an easy-to-understand infographic format.
In it, OfferClimb details 4 strategies that have brought them success:
The Lipstick Flip
This is a strategy when you want fast and relatively hassle-free profits. It involves finding properties that need only minor cosmetic repairs amounting to around $5k, then reselling it quickly. This is especially effective in a fast-moving market where prices are rising quickly.
Buy & Hold
Buying and renting properties allows you to get a steady, passive cash flow from your tenants rent, as well as tax benefits. To do this, you need to find viable properties, make repairs, and secure good tenants. This strategy is good when looking for diversifying your real estate portfolio, and does not require you to time the market. However, you do need to make sure that the rent that youll get will be greater than the upkeep of the property.
Otherwise known as flipping contracts, it involves buying low and selling low when assigning real estate contract rights. You need to be able to spot underpriced properties and buyers FAST. Best time to do this is when the market is on the uptrend.
Buy, Renovate, Refinance, and Repeat
The BRRRR strategy is a great way to get both short and long term gains, and you can do it as long as you can get a good deal on a property below market value. However, the whole process does take a long time, and it can be a challenge to find a bank that can give you a good refinancing rate unless you have excellent credit. For guidance on how to best plan this renovation timeline, check out Rehab Financial Group’s Property Investment Plan guide.