Are you confused about where to start
investing, or… what type of real estate
investment is right for you?

“How can I identify the right real estate investment strategy for me?” That is the question that we are asked more than any other and it one of the easiest to deal with.

One of the biggest challenges in real estate investing is determining the right strategy and getting the right real estate investment information for you and for the market that you are in. We are all bombarded with television ads telling us to buy this program and learn that technique, seminars selling a no money down system, books that talk about foreclosures, flips, lease options, subject to financing and much more. How can we know what is going to be best for us and give us the best possible chance for financial success? We have entered a new age of real estate investment…

The old paradigm for real estate investment was to buy an “extra house” and use it as a rental for 30 years while the tenants paid for your house. You had to do all the maintenance, repairs, and deal with all the emergencies. At the end of the 30 year mortgage you got the cash flow to add to your other retirement. If you were even more aggressive you had more than one rental and got to do even more work on your “investments”. It doesn’t sound that good to me.

The new paradigm for real estate investment includes all the techniques that I mentioned above and many, many more. Because there are many different options and ways to invest, it is more important for you to identify your strategy first or you may spend months or even years trying to find the one that “fits” for you. There are literally dozens of different techniques being commonly used in today’s real estate market. Our first 2 newsletters “Real Estate Tips and Techniques” talk about the most often used strategies including many “no money down” techniques.

However, just knowing the strategies isn’t enough… you MUST know the strategy that will work for you! After coaching countless investors we have found that there are only 5 criteria that you must look at to identify the right strategy for you. Yes, there are only 5 and 3 of them are all about you!

1. What do you already know? In other words: what is your edge, advantage, or niche? You may have some past experience, family history, or advantage that you are not even aware of that would give you an instant head start and put you ahead of your competition. Let me give you an example: A high income doctor recently hired me to help him identify a real estate strategy and to then work with him to get his money working for him. He had heard of the incredible inflation in the recent Las Vegas market and wanted to get in on the appreciation that was happening there. I asked him what he knew about the Las Vegas market and he reluctantly told me that he knew nothing about it, had no friends or associates there and would be starting from scratch. By the way, he said, “I also have no spare time.” I asked him about any real estate investing experience and he told me that he had none, but that he did own his own home and the medical building where he practiced medicine. THAT WAS HIS ADVANTAGE, he just had never considered making money from the building. He is now focusing his real estate energy very successfully in the real estate market that he knew best rather than trying to learn an all new strategy!
2. What are your resources? This should be easy to answer and is critical in determining your strategy. Your financial resources directly relate to the type of real estate strategy that you can complete successfully. Consider your financial resources, savings, IRA, home equity, credit lines, and don’t forget resources of others that may be available to you. Many of our clients have used the money of friends or family for their first deal. Remember, money is just one tool in your bag. It is not required, but it generally makes investing easier. Also consider all your non-financial resources.
3. What is your “Risk Tolerance”? Some of the clients that we work with are huge risk takers and others are very conservative. Where would you fall on a 1-10 scale of risk/caution? Often the riskiest deals seem to provide the best returns but we work with our clients to take the risk out of the deal by structuring the deal in a safer way or by doing more due-diligence. It is possible to choose a strategy that will give the rewards that you are looking for without excessive risk. Sometimes just putting more money into the deal allows you a fall back position to protect against a possible decline in real estate values.
4. What are the local investment conditions? As you know, some of the larger markets in the U.S. right now are VERY high priced, ie. San Francisco, Los Angeles, NYC, and Boston to name a few, while others are lagging in the market. It is critical to know what is happening in your vicinity to match a strategy to those conditions. Are you currently in a buyers market or a sellers market? Will your area’s current rental prices support a mortgage payment? How can you learn more about your local market?
5. What are the national or even international trends? This is one of the most important considerations for your investment strategy because it will determine your long-range success or failure. You will find that it is easy to buy properties but you must buy with your exit in mind or you will find yourself the not-so-proud owner of a bunch of negative cash flow properties. National trends to consider include: A. The current low interest rates. How long will they stay low and how will that effect your investments. Should you get adjustable mortgages or lock in the longer term rates. B. Retirement of the baby boomers. What will happen to real estate values in your area when 79 million people retire over the next 15 years? Will boomers move in or move out of your area? The boomers are already migrating to warmer climates and that will dramatically effect your real estate investments.

Three of the above factors are all about YOU! The other two are about the investment market for real estate. Don’t make any decisions about where, when, or how much to invest without thinking about these five criteria for defining your investment strategy and

DO NOT START INVESTING WITHOUT A STRATEGY

To get support for identifying the strategy that is right for you, ask for “the Personal Real Estate Jumpstart” and sign up for a FREE 20-minute one-on one real estate investment coaching session with Will or Virginia and we will send you the “7 Steps From Vision to Results” full of real estate investment information to get you started immediately!