An expert has shared his experiences from his property investment journey, here his story and also provide the useful advice to the newbie property investors;
“Remember that time, when I got started in property investing, I was flat-broke, my credit was obliterated and I was trying my best hard to recover my financial from a major business setback. In that time, the housing market was in a complete state of distress, and it is extremely inadvisable to become a full time property investor.
Believe it or not, this ended up being incredibly advantageous for me in the long run for 2 key reasons. First, I had to take action immediately instead of waiting the housing market turns good as I had a stack of debts I needed to pay and I needed to pay them off now. Second, I had to learn how to acquire properties cheaply that I would have no problem quick selling them even in this such market. Both of these reasons have been critical skills to my property investing success and have allowed me to build a million dollars wealth.
Wanted to know what strategies the above expert have used in such desperate housing market? Continue read on and you’ll get the answer!
➊ Buy and Sell the property simultaneously; Double close
A double close strategy is when you both buy and sell the property at the same time. I would do a double close id I though the markup substantial enough that the potential buyer would balk. By having 2 sets of closing documents, the end buyer only sees the price you are selling the property at and not what you paid for it.
This strategy may apply when you put a property under contract and then assign your rights in that contract to an end buyer for a fee. It’s only takes a little money. What you need is knowledge and a lot of “hustle”. Wholesaling served as the foundation of my property business and is what “kept the lights on” in the beginning.
➌ Spec Home Building
Short for speculative, this is building a home without having an end buyer lined up prior to starting construction. The risk of this strategy is relatively high as at the end of every boom speculation runs rampant and often these spec home wipe people out when the market inevitably comes back down to earth. If I build a spec home it is priced for moderate level hosing and can be used as an excellent rental if it’s not for sale.
➍ Rehabs (rehab to rent, rehab to owner finance, rehab to sell)
This strategy is seem really common for the property investors. Basically you are transforming a house that needs repairs or updating. The finish-out of my rehabs vary pretty dramatically depending on whether I’m getting a house ready to rent or ready to sell. If I’m looking to sell, I certainly create that WOW factor.
➎ Land Investment
I have bough prime properties that presented incredible value. Again as this is a speculative type of investment, every time I buy a piece of land I also make sure I can profitably develop it in case it doesn’t sell. Remember, until you sale, land generally only produces outflows.
➏ Owner Finance (homes and land)
When you owner finance a property you are essentially taking the place a lender traditionally would be in. Instead of receiving a lump-sum at closing, you are paid out over a period of years and receive interest. This can be a great tool for creating passive income! You do a couple of months’ worth of work upfront and get paid for that work for 15, 20 or 30 years. What a business!
➐ Rental Properties
Rental properties have historically been the #1 wealth building strategy in property investment field. Someone is paying for the costs of your asset as you enjoy the benefits of appreciation, equity build-up and tax advantages. i primarily focus on moderate income housing that performs well in any market environment. Additionally, every rental I purchase is always positive cash flow deal which mean the income more than covers all of the expenses associated with the property. Rental properties are a great way to generate sustainable passive income.
In order to be successful in property investment field, you’ll need to learn and take action. Remember, no matter how worst the housing market is, there’s always have opportunity and all you need to do is dig it out. Of course, you must have enough capital on hand before getting started, and not forget to use part of your capital as emergency fund. This is really important!