Investor

Real estate investing offers a variety of tremendous opportunity to build wealth, but make no mistake, it is a business. It is a learn as you go endeavor. Educating yourself and finding smart real estate investment tools is VERY important. The right tools can provide an advantage over other real estate investors. To be a successful real estate investor, you must be willing to do your homework, and base decisions on numbers. For example, verifying a positive cash flow on a prospective investment is absolutely crucial, or your purchase may prove to be a loss.

As with any real estate purchase, location is key, and finding good tenants can be challenging. Real estate investing is not for the faint of heart. The more properties you accumulate the more important it will be to assemble a great team to cover the demands. It does not always require a lot of money to get started. If you are looking for a real estate broker for your team, I am happy to do my part in helping you locate, purchase and help you assemble a team to get you started.

Formal education will make you a living. Self-education will make you a fortune.

– Jim Rohn

Dedicated Real Property Investors

Flipping houses requires buying a real estate property in a poor condition, fixing it up, and selling it to another investor or home buyer. Flipping an investment property is one of the best real estate investments for those beginners looking for quick cash. You can make a significant amount of money very quickly. A flip can be completed within a couple of months, and you can end up with thousands of dollars in profit.

House flipping provides access to additional sources of financing. Loans for flip investors, both private money loans and hard money loans become more affordable when repaid quickly lowering interest rates and the total principal due.

Flipping can be favorable for first-time real estate investors, however it might seem challenging to beginners without previous knowledge or experience in the real estate business. It allows unseasoned investors to better understand most facets of the real estate business such as: investment property purchase, performing repairs, updates, improvements and selling a house. It’s a relatively short commitment to determine if this investment strategy is right, and it is well suited for dynamic personalities and those with a resourceful nature.

This is not a passive means to make money; you have to be willing to work hard. Assemble a strong real estate network to successfully buy properties, repair them, and sell them quickly enough to make a profit. Building such a network takes time. Investors must be sure the sale price will exceed the sum of the initial property price and the repairs.

Buy, Renovate, Rent, and Refinance (BRRR) investment opportunities can generate revenue relatively quickly. A BRRR means an investor buys a distressed property, repairs and/or improves it, which will increase the value (depending on the property). The investor rents it out for less than a year, with the end goal of refinancing to buy another investment property. This method of forced appreciation can backfire if you do not buy the right property as it is possible to over-improve a property.

The potential ROI (return on investment) will increase in the long-run upon resale. BRRR is among the best strategies in real estate to build a property portfolio quickly. You don’t need additional sources for financing a rental property as you use your existing investment properties to buy new ones and build wealth.

BRRR is not ideal for new real estate investors with no previous experience in the housing market. It requires knowledge of properties and a network of real estate professionals in order to succeed. BRRR is among the most active real estate investing strategies. You can’t make passive income. It is best to work with a savvy real estate broker who can help you understand the determinants of real estate value more completely.

Traditional and Seasoned Investor Strategies

Investing in undiscovered suburban cities can be a bit speculative, however it may be a cheaper way to get into the business of real estate investing.

Buy-and-hold investment properties – An investor purchases a property with the goal to keep the property at least until there is a significant increase in value. Most successful investors keep their investment properties even when the value has increased significantly. Most investors rent out their property to receive the rental income while they wait for the market value to increase. 

Traditional Rental Properties are similar to buy and hold, and is one of the oldest real estate investment strategies. The rental is on a long-term basis, either on a monthly or annual basis. People who cannot afford to buy a home still need a place to live. If the economic situation changes and demand for rental properties decrease, you can convert your property to a short-term, or short-term rental.

A wise income property purchase under a short-term rental could have a high ROI in terms of cap rate (a descent cap rate is about 8%) and cash on cash return. If you hire a professional property management company, a traditional rental can result in passive income. Property managers charge a percentage of the monthly rental income or a flat fee. They should increase your profitability by optimizing property management.

Short-term rental can be combined with buy and hold real estate for maximum profitability in the short and long run. Short-term or vacation rental properties achieve a higher ROI which are rented out on a nightly basis. Depending on the location and condition, an investor could make a lot of money right away with an short-term rental. A smart rental plan may include flexible pricing to maximize your profitability. Decide on high demand peak rental rates and lower rates during lower demand periods to optimize your occupancy rate.

Many larger urban communities have recently implemented strict, and prohibitive short-term rental regulations and laws. If you’d like information about the Portland Metro Area, you can leave your question below and I will get back to you as soon as possible.

Short-term rentals mean the security associated with renting out on a monthly or annual basis is non-existent. Unless you hire a vacation rental home management company, hosting for short-term rentals requires a great deal of effort. The ability to use the property for your own use is a clear advantage in owning a short-term, or vacation rental.

Foot in the Door Investor

House hacking is an excellent gateway to begin a business in real estate investment. Investors can buy a duplex, triplex, or another multi-family home in order to live in one of the housing units while renting out the rest. A kin to a buy and hold and traditional rentals, your tenants pay for your rent in along with your investment property mortgage.

The rental income you make should be enough to cover the mortgage payments to the bank, which means paying off your home and your rental property. There is no need to spend money on a professional property manager; you can manage the duplex or triplex on your own as you live on site. If you buy a property in a low price to rent ratio market, the monthly rent should be enough to leave you with positive cash flow.

Bad tenants can make occupying the property a real nightmare. House hacking is not a passive real estate strategy. You will need to manage the housing units which you rent out to make money from real estate. Start with a small multi-family home easily divided into 2 or more housing units. Screen your tenants particularly well as they will also be your neighbors. Be sure the rental income covers the complete monthly mortgage payment and routine expenses.

If you would like to learn more, or you are looking for a real estate broker who has a network of professionals to serve your investment needs, please fill out the information below.

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