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Sometimes I get so revved up about something—a new job, a business opportunity, a trip to my in-laws—that I don’t even know where to begin. Obviously, the nature of my excitement differs depending on the cause but one thing’s for certain—a million thoughts run through my head and I spend most of my day trying to corral which ideas might work best for me and which ones I should kick to the curb. For starters, trying to fake the flu before our flight to my wife’s parents didn’t work out well, so I had to check that one off the list. I did, however, come up with some coherent plans when deciding to buy and sell homes for the first time. It took some trial and error before I uncovered the best real estate investment strategies for beginners but eventually, my hard work paid off.

The Top 3 Real Estate Investment Strategies for Beginners

Choosing a Beginner Real Estate Investment Strategy

We’ve all been there. A chance to make some money presents itself and a few different paths to prosperity spring up. One may not be better than another but I learned to parlay my strengths as a business owner into a successful real estate venture. I adopted three separate real estate investing approaches before finding my niche. Follow along and see which one fits your goals and style.

Buy-and-Hold

When I got my start in real estate, much like my other investment portfolios, I thought a lot about time frames. I set some goals and figured out how many years I could wait for an acceptable return on investment (ROI). Believe me, often my patience wore thin and I wanted to sell a property a month after I’d bought it, and either break even or hopefully make a few bucks. I usually shook off the nerves and targeted five-year horizons, giving myself time to assess the market and set an acceptable sales price. Naturally, there were some hits and misses but a buy-and-hold strategy certainly plays out as a viable way to invest in real estate.

With a buy-and-hold plan, I had to hope for a market upturn in that five-year period. Often, the market followed the ups and downs of the economy but some factors fell within my control. I purchased property in either established or up-and-coming neighborhoods, performed regular maintenance, made the necessary upgrades, and more often than not, my ROI targets were hit. Along the way, my duties as a landlord occupied a good deal of time. Those tasks, however, were a double-edged sword: While I waited for my strike price, the rental income helped pay the bills and create some capital for subsequent investment purchases.

Wholesaling

I knew quite a few people in my community back then. Operating an independent insurance and investment agency for 10 years, I constantly marketed my name and my brand. Customers, friends, family, and fellow business owners came to trust me with their financial and insurance needs so when I decided to wholesale some homes, I had developed a pool of prospects from which I could connect motivated sellers with anxious buyers.

As a rookie investor, my upside to wholesaling properties involved the limited amount of capital I initially had to invest. Granted, I’d run a successful agency but I wasn’t willing to bet the farm before I got the hang of this business. With this particular approach, I found some undervalued properties the owners simply wanted to sell quickly. I’d enter into a sales agreement and then attempt to find an interested buyer before the closing date. That agreement allowed me to assign the contract to someone else–typically an active home-flipper who didn’t have the same pipeline to deals as I did. In most cases, I linked buyers and sellers before the clock struck midnight but there were times when I purchased the property myself and held it a bit longer than I’d intended.

Buy, Renovate, and Sell

I tried three valid real estate investment strategies and my hands-on experience yielded a clear favorite. I picked my favorite strategy based on the ROI I’d realized after closing on a couple dozen deals. Buying, renovating, and selling homes made the most positive impact on my bottom line and didn’t involve more risk than any other play. I simply stuck to the advice I’d been given in the early days—find below-market homes in great locations.

Buying ugly properties, fixing, and marketing them for quick turnaround occupied a good deal of my time—but not more than wholesaling or buy-and-hold deals. Fortunately, I had the financial flexibility to carefully walk through the process a few times while developing a network of trusted and dependable craftsmen. I needed dependable contractors that charged reasonable rates, showed up on an agreed date, and most importantly, finished the project by a set deadline. Of course, I blew through a few carpenters and plumbers before I found the ones who understood that time was of the essence and reliability led to more work. Once I solidified these relationships, I became less occupied with poring over every detail and more concerned with finding my next investment conquest.

The Best Strategy to Start Investing With

A lot of sweet confusion swirled around my mind at the start of my real estate investing days. The adrenaline flowed but I was never fully certain I could make a successful run. Like any investment, risk took its place right alongside reward, and a glimpse of the downside swayed me toward seeking some help. After steering through my first few purchases, I found another trusted resource who provided expert training and guidance in successfully buying, renovating and selling homes. The HomeVestors® franchisee opportunity bridged many gaps where my business acumen ended and my home buying inexperience began. HomeVestors® nationally-recognized “We Buy Ugly Houses®” marketing helps me to find undervalued properties in ideal locations. Acquiring those leads formed the backbone of my success.

Contact HomeVestors® today to discover how you can develop a winning real estate investment plan of your own.

 

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