Just as there are many property types, there are also many ways you can make money with those properties. Every deal is different and may require a different strategy, so it is best to get acquainted with as many of these methods as possible.
1.) Fix and flip small rundown house– We’ll start with the obvious and most popular one. Buy a cheap house, fix it up, re-sell it.
2.) Buy-n-hold houses – Another favorite. Buy a house, hold it for a significant length of time (20+ years), pay the mortgage down, and live off the cashflow in retirement.
3.) Wholesale houses- A popular choice for beginners, wholesaling involves scouting your local area, finding great deals, putting those deals under contract to buy, and then “assigning”(selling) those deals to an investor for a fee(you must know people).
4.) Hybrid fix-n-hold for houses – This involves finding the good deal and remodeling the house from the fix-and-flip but the long term benefits of the buy-n-hold. Simply, a single house is purchased for a low price, remodeled to force appreciation, and held until the market price significantly appreciates, then it’s sold. This method seeks to maximize the ROI while limiting the risk.
5.) Wholesaling apartment buildings – Some investors make their entire living off wholesaling just one or two large apartment buildings per year. With the larger price comes less deals but much higher agent commision.
6.) Fix-and-flip large apartment buildings – There are many old apartment buildings in need of a complete overhaul. The benefit of flipping apartments over single stand-alone houses is the ability to collect good rent while the property is being marketed for resale.
7.) Buy-n-hold large apartments – Similar to the long term approach to single stand-alone houses, but on a much larger scale.
8.) Hybrid fix-and-hold for apartments- Find a low-cost apartment building needing help, fix it, then rent it until it is most advantageous to sell.
9.) Turn-key-investing – This type of investor is similar to a fix-and-flipper, but seeks primarily to sell the remodeled properties to out-of-town individuals seeking a good place to keep their money moving. Often times Turn-Key companies also can handle the management and all other issues, making the investment truly passive for the purchasing investor.
10.) Commercial lease – Often times big businesses do not want to own the building they use (for tax purposes), but instead rent the building and pay all costs associated with the building such as maintenance, taxes, insurance, and more. You, as an investor, can own these buildings for highly-passive income.
11.) Vacation rentals – Buying a property in a vacation area and renting it out when you are not staying there is not only a great way to pay for your vacation house but also build equity in a location where prices go up (and down) with more extreme force.
12.) New construction, residential – Just like it sounds. The process of building a home with the intent of reselling it.
13.) New construction, commercial – Like residential, but involving commercial places.
14.) Cash purchase, sell on contract – If you have the cash, you can buy properties and then immediately re-sell them to buyers who may not be able to conventionally qualify for a mortgage. You can sell to them on credit (carry their mortgage) for as long as you’d like, or sell the credit-note for cash to investors in the future. Make sure to collect a large down payment when using this method.
15.) International real estate investing – You don’t need to live where you invest (but it often does help a lot). Many investors choose to live wherever they like but invest where it makes the most sense – often overseas. While there are many challenges to this type of investing, there are also huge rewards to those who can effectively navigate the international waters.
16.) Off plan selling – Without actually raising capital to construct houses. Look for buyers at a slightly lower rate than the market price, let them pay before the actual construction commences. Here you must have rock-solid reputation for buyers to trust you. You must also have all the approvals ready and also a show-house for demonstration.
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