Different Real Estate Investment Strategies

Buy and Hold

Creating long-term, residual wealth. Emphasis is placed on identifying and locating the resources necessary to make a deal successful and to protect future interests. Analyze closing and financing fees and learn strategies that can eliminate fees and maximize cash flow.

Specific Steps:

  • Understand the buy and hold investment strategy and its benefits.
  • Differentiate available funding options.
  • Identify cash flow variables and obstacles.
  • Understand when a purchase contract is necessary.
  • Differentiate property ownership in a Mortgage State vs. a Deed of Trust State.
  • Learn what title insurance does and does not protect.
  • Review the HUD-1 form and identify and calculate closing costs.

Fix and Flip

Turn properties quick for cash. The anatomy of a flip, from finding motivated sellers to establishing clear objectives, to the advantages and disadvantages of various financing and marketing strategies, are discussed. The way to leverage OPT (other people’s time), while identifying the hidden potential waiting to be unlocked in investment properties.

Specific Steps:

  • Understand the value of time in a fix and flip strategy.
  • Distinguish the ideal target property for a fix and flip.
  • Identify the steps to achieving a successful fix and flip.
  • Decide which tasks to undertake when doing a fix and flip.

Pre-Foreclosures

  • Understand the foreclosure process and how pre- foreclosures fit into the process.
  • Learn the value of and how to create your own complete and timely property lists.
  • Learn the fundamentals of building rapport and leaving the first contact with useful information.
  • Understand the importance of analyzing the deal to create and implement a variety of solutions for homeowners.

Foreclosures

Acquiring foreclosed properties through two methods: auction and bank REOs. Understand that there is much preparation required prior to bidding at auction. You need to become a strong participant in the auction process as well as how to find and approach banks to acquire REOs will be covered.

Specific Steps:

  • Understand the process of buying foreclosures at auction and through REOs.
  • Learn about property lists and understand the importance of working with a complete list.
  • Learn how to analyze the deal and how to conduct pre-auction due diligence.
  • Identify the key components to an REO offer.

Tax Lien Certificates

Secured by real estate and guaranteed by the government, tax-defaulted paper is a little-known vehicle used by wealthy investors for decades. Delinquent taxes of others in return for a handsome interest rate and, sometimes, even get the property itself — free and clear. Understand the differences between tax lien certificates and tax deeds, how to research properties online and identifying some of the risk factors associated with tax foreclosures.

Specific Steps:

  • Gain an overview of tax foreclosure investing.
  • Explore the processes and systems of acquiring tax delinquent properties.
  • Identify some of the risk factors associated with tax foreclosures.
  • Understand how to utilize excess proceeds.
  • Understand the difference between tax lien certificates and tax deeds.
  • Explore online auctions.

Lease Options

A strategy to sell a property over time. Creative acquisition strategies. We recommend learning how options differ from a standard lease, the best way to create options, the proper method of transferring title, and the differences between options and other sales methodologies. There are many legal aspects of options and recommend learning the ways to avoid problematic issues. Current Texas law has made lease option illegal, unless the Deed is delivered within 179 days or less.

Probate Purchases

A strategy for obtaining leads to buy real property that is for sale but has not yet been exposed to the market. Basic probate terminology will be covered as well as some of the factors contributing to seller motivation.

Specific Steps:

  • Understand how motivations in probate differ from those of other motivated sellers.
  • Know and understand specific terms used in and related to probate.
  • Recognize and understand specific information found in probate documents.
  • Learn a step-by-step process that may get an investor to a property before it is marketed for sale.
  • Understand the difference between cases wherein the investor has a higher chance of obtaining a discounted purchase price and where the estate is unlikely to discount the price or sell the property.

Subject-To Purchases

Method of buying property subject to the seller’s existing financing while avoiding some of the risks. Present offers to motivated sellers and to gain ownership of property without qualifying for new financing and without using much, if any, of their own money. In addition to analyzing the property, you should learn how to evaluate the existing financing, the seller, and the market.

Specific Steps:

  • Understand the concept, advantages, and process of purchasing property subject to the seller’s existing financing.
  • Understand the goals of pre-screening sellers.
  • Identify key points in negotiating a purchase subject to existing financing.
  • Identify points of analysis when considering the subject to deal.
  • Understand lender motivation factors and learn how to address those factors.

Wholesaling

The single, lowest risk and no-money-down-deal available to most investors is wholesaling. Find the deal, put the property under contract and sell their position. Identify necessary resources, analyze the legal environment and identify the marketing skills required to put together a successful deal.

Specific Steps:

  • Understand the wholesaling investment strategy.
  • Identify key concepts of successful wholesale deals.
  • Determine the preferred wholesale acquisition timeline and process.
  • Understand some of today’s legal issues that can impact wholesaling.

Rehabbing

The many facets of running a successful rehab project, including the analysis of repair options and cost factors. The benefits and pitfalls of rehabs and the way to find economically feasible properties, based on an understanding of cost estimations. Study evaluative approaches to cash-building methods and time-effective, practical approaches to running a rehab business. We always recommend running your investment business in an effective “hands-off” manner.

Specific Steps:

  • Understand how to leverage resources involved in rehabbing.
  • Identify the priorities, procedures, and techniques of successful rehabs.
  • Learn to manage contractors effectively.
  • Identify the benefits and pitfalls of rehabs.
  • Develop a successful marketing plan, specific to houses in the rehab stages.

Short Sales

Create significant profits when purchasing pre-foreclosure properties by discounting existing mortgages. The critical keys to success in the short sale process are: conversations that take place between sellers, loss mitigation specialists, and other professionals who determine property value. Analyze the components of a successful offer and learn the secrets of handling second mortgages, judgments, liens, and other title issues.

Specific Steps:

  • Understand the process of a short sale.
  • Understand the role of each party in a short sale transaction.
  • Evaluate short sale deals and determine how much to offer.
  • Understand why and how to influence the Broker’s Price Opinion.
  • Examine the documents used in a short sale transaction.
  • Discuss how to communicate effectively and work with the seller.
  • Learn how to deal with banks, liens, judgments, and other title issues.

Commercial Real Estate

Understanding of the basics about apartments, office, retail, and light industrial buildings is very important. A property’s physical aspects, lease type, and financing options. The due diligence factors that contribute to a property’s value more than location alone. Determine what type of investment you may be best suited for, the nuances of various types of commercial investments.

Specific Steps:

  • Understand the different types of commercial real estate investments.
  • Review the leases that are involved with each type of investment.
  • Learn how to finance a commercial real estate investment.
  • Review samples of cash flow for each type of investment.
  • Learn how to find a good commercial investment.
  • Understand the key steps involved in acquiring commercial real estate.
  • Understand property management options and exit strategy considerations.

Land Development

Conceptualize the creation of a minor subdivision. A five-step process for land identification, procurement, and entitlement The focus is on basic principles and strategies of land location, market needs analysis, project approval, and the decision-making processes involved therein. Understand the viability of a project for potential profitability and marketability while learning the key role that knowledge plays in the land development process. Developing a feasibility study, to land identification, to plan submittal are all-important aspects to understand.

Specific Steps:

  • Understand the land development process.
  • Evaluate a parcel of property to determine its highest and best use.
  • Identify the advantage and disadvantage aspects of a specific property.
  • Learn about the ‘when’, ‘where’, and ‘how’ of finding the right partners and money.
  • Gain an overview of working with local municipalities.
  • Understand the relevance and importance of contracts and option agreements.

Owner-Financed Notes

Generate significant passive income yields when purchasing real estate secured seller-financed notes. Locate and negotiate the purchase of a note, structuring and creating notes and negotiations that take place between note holders and investors. The due diligence involved in compiling and verifying the necessary information, calculate an offer based on desired yield, analyze deal risk factors, and the process of closing and funding a note purchase transaction are important to thoroughly understand.

Specific Steps:

  • Learn what a seller-financed note is and its advantages and disadvantages.
  • Identify the 7-step process of investing in seller-financed notes.
  • Understand how to locate existing seller-financed notes.
  • Calculate and verify note terms and pricing options.
  • Evaluate a seller-financed note to determine pricing options and safety.
  • Understand how to properly structure and negotiate a seller- financed note.
  • Examine the documents used in transacting the purchase of a seller-financed note.

IRA and Retirement Plan Investing

The benefits of the self-directed IRA as a vehicle that provides the real estate investor the freedom to invest in what he/she wants, instead of what his/her insurance company or stockbroker is offering.

Specific Steps:

  • Understand what a self-directed retirement plan is, how it works, and how to use it to purchase real estate.
  • Learn the consequences of prohibited transactions and how to avoid them.
  • Learn how a retirement plan can benefit you and your investing goals today. Explore advanced principles and techniques to effectively manage the self-directing of your retirement plan.
  • Understand what is necessary to successfully pass on and inherit retirement plans without paying inheritance tax.
  • Review diverse situations like prohibited transactions and UBTI and UDFI tax and their impact on your retirement plan’s success.
  • Discuss in greater detail the difference between direct and indirect investing using retirement plans.