The Makeup of a Successful REI BusinessOct 11, 2021
The Real Estate Investing business is one of the most attractive and lucrative business opportunities that extends an entry-level to almost anyone, and it is BOOMING!
If you could ask the wealthy that all-important question, "how did you make your money?" Almost every person you could ask that question of would have real estate in their background, or it would be in the family member's background that created their initial wealth.
95% of the world's wealthiest people became so through real estate.
So, of course, Real Estate Investing is a hot industry in very high demand, and yes, it makes excellent money, BUT it's not just as simple as buying low and selling high.... or is it?
Yes, it can be that simple. However, there are a lot of moving parts. You need the money to buy the houses (BUT maybe you don't). Then you need to know what makes a great deal. Then we need to know how to find that deal and how to close to that deal.
Of course, unless you're a trust fund baby or backed by a prominent benefactor or hedge fund, you won't have enough money to buy the deals. If you don't have any of these things, you won't buy the deals at all.
So you have a few options – You can raise private funds to buy real estate deals, or you can learn how to purchase houses leveraging no cash, no credit techniques. These techniques are tried and true and are being leveraged by successful investors all over North America.
Successful investors who have funds to buy typically still utilize a few of the following strategies to acquire homes because you can't always make a cash offer to buy a deal, and not every deal requires a cash offer. But to be successful in this game, you need to have multiple deals working and cash flow coming into the account.
The following are some of my favorite Real Estate Investing strategies.
- Lease Options
- Land Installments
- Assign Outs
- Owner Financing
- BRRRR (Buy, Rehab, Refinance, Rent, Repeat)
- Turnkey Rentals
Lease Options: Lease options are one of my all-time favorites, and it is what I built my company, Little Pink Houses of America™, around. Lease options allow you to sell a home on terms, BUT it also can allow you to buy a house on terms.
Subject-To: Subject-to is when you, as the buyer, purchase the home from the seller, take legal title to it, and leave the underlying mortgage in place. This strategy is lucrative and allows you to buy houses on exceptional terms. We have a unique course on this for JUST $1.00!
Wholesaling: Wholesaling is the main entry point for most novice Real Estate Investors and can be a good and lucrative strategy. Wholesaling is the perfect strategy for someone who isn't looking to control a rehab or worry about the end sale. Wholesalers are very frontend-focused. They find a property, make an offer on it, and sell the right to purchase it to an investor for a profit.
Wholetailing: Wholetailing is simply Wholesaling retail properties. This strategy has been on fire in this HOT seller's market. It allows you to give sellers a solution that sells their home but isn't a low-ball cash offer and doesn't charge them high dollar Real Estate commissions.
Land Installments: When constructed right, they lay out clear terms for purchasing property through "installment" payments. An Installment Sale, or Installment Contract, is an agreement between a real estate seller and buyer. The buyer agrees to pay the seller the purchase price through "installments" over a set period.
Assign Outs: An Assign Out is a strategy to create a "terms" deal with sellers and buyers. You set the agreement up for success and get paid to assign your interest to one of the parties.
Options: Generally, a real estate Option is a contract on a specific piece of real estate between a buyer and a seller. The seller offers the buyer the option to buy their property at a fixed price and a specified period. The buyer pays for this option in the form of consideration (more in the contracts section on "earnest money deposits" or "binders" for contracts).
Owner Financing: Owner Financing, also known as "Seller Financing" or "Seller Carryback," is a Weapon and strategy where the seller conveys legal title to their property to a buyer and carries back a mortgage on the property. In a typical traditional sale, the bank loans the money to a buyer to buy the home. In an Owner Finance transaction, the seller becomes the bank. Essentially, they are lending the buyer that home in exchange for payments, just like a bank.
BRRRR (Buy, Rehab, Refinance, Rent, Repeat): BRRRR is a wealth-building investment cycle that allows you to acquire properties at a discount then rehab them to the standards of a retail rental. You then refinance the home at its new market value while you stick it into your rental portfolio. The last R is the all-important repeat. Take your funds, buy another deal and do it again!
Turnkey Rentals: Turnkey rentals are precisely that... turnkey. These are income-producing rental properties that are for sale. These are performing assets that spit out a predictable income every month. These deals can be easily found and take the funds to close. Turnkey Rentals are a long-term strategy being that you aren't buying at a discount and creating equity.
To sum it all up, many roads lead to Rome. Rome also wasn't built in a day. This game is lucrative, and as long as your providing people with solutions, you will get paid for it. Keep learning, keep adding tools to your toolbox and stick with it. The work will pay off BIG, and you will find the freedom you're seeking.
If you find any of these strategies intriguing and want to learn more about them, comment below, and we will create content on those strategies. Thank you for reading. Don't forget about our YouTube channel PINK TV, where you can channel your financial freedom through real estate!
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