How to Leverage Your Strengths to Make Fat Stacks in Real Estate Investing
Lots of different ways to make money in real estate
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There are a bunch of different ways to make money in real estate investing. I went over different real estate investing strategies in the last post. I think it makes sense to choose strategies that leverage your strengths.
What Strengths Do You Have that Are Applicable to Real Estate Investing?
There are tons of skills applicable to real estate investing. This short list is good for a few ideas.
1. Money: You need money to buy an investment property. If you only have enough money to buy one rental, it would probably be better to be more selective. If you have a lot of cash on hand, you may be more inclined to take a volume approach and buy a bunch of property. Finding the “perfect” property may be too time consuming. The quicker you can buy property, the quicker the gains will compound, allowing you to buy even more property.
7 months ago, I was looking at buying property pretty aggressively. At the time, I had a lot of capital. I didn’t pull the trigger on anything, because none of the rentals met my criteria to a T. In hindsight, I should have bought one or two duplexes. I shouldn’t have been so concerned with the “perfect” property. It would have been nice to collect that cash flow. Of course, no one knew the stock market would get crushed, and interest rates would go up to 7%.
2. Time: Do you have more time than money? You can spend more time finding deals. I’ve met some investors that live on Zillow, and are constantly looking for deals. You can cold call, text, and send mailers to potential sellers to find off market deals. You could self-manage your rentals. I think it makes more sense to hire a property manager, but self-managing would increase cash flow.
3. Handyman Skills: This includes home repairs, electrical, plumbing, flooring, carpentry, painting, etc. If you have handyman skills, you may focus on fix and flips, or buying property in need of renovation. I can’t fix a doorknob, so I’ve stayed away from doing any renovations or big upgrades. I don’t have the guts to handle the additional risk. This could change in the future. Much easier to buy a property in need of fixes if you have the skills already.
4. Network: Do you know a bunch of investors or people with money? You can use their money to buy property. I’ve only used my own money to finance deals, but using other people’s money is common. I’ve been to a few real estate investing meetups where this was the sole focus. The meetup would bring investors together to pool their money to buy large apartment buildings.
Strengths I Utilize in My Investment Strategy:
My job has been my biggest strength in real estate investing. Working for a mortgage lender that gives special employee discounts on closing costs/pricing is an underrated strategy. I’ve probably saved $50k+ in closing costs getting financing through my employer. Without the employee pricing, it would have been more difficult for my duplexes to cash flow. Financing is a big part of real estate investing. Having the financing portion covered makes it easier to find deals, and figure out what will cash flow quickly.
P.S. This strategy may not work as well right now, since interest rates are high. It’s harder to make money working for a lender now, than it has been in the past. And not all lenders give employee discounts on pricing or closing costs.
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