Aligning strategy and goals

[David N.]

I'm just getting into this. Everything I read says that I need to align my strategy and my goals, which makes perfect sense. However, I have yet to come across a comprehensive and clear analysis of how different investment vehicles align with different strategies and so I'm looking for someone who can provide that breakdown or knows where I can find it. Here's my analysis and maybe someone can tell me if they agree/disagree. 

Fix and flips and BRRRs and LTRs all seem like vehicles where the bulk of the yield is coming at the point of sale when you capture equity. With fix and flps and BRRRs that day comes sooner relatively to LTRs. BRRRs and LTRs both generate cash flow but it seems like the real value comes down the line. Fix and Flips and BRRRs are more work so obviously if I don't want to invest that time and that money then that wouldn't be the strategy for me.

With STRs, the cash flow potential is reported to be higher from what I read, assuming you buy the right property, and understand the ongoing costs.  It seems like with LTR's I might be making a hundreds of dollars a month, whereas with STRs, I might be making thousands. Obviously, it all depends on doing things well, but that's the best case.

Do I have this right?

Thanks,

David

[Henry Clark]

Looks like you got interested in real estate and joined bigger pockets back in June 2021 and have not made an investment.  You have probably read and watched lots of material.  

If you had bought back then you would have a great deal.

You need to do a deal and move forward. Looks like you're interested in doing STR so do one. You won't learn anymore reading or asking for advice.
.  
Key thing is to calculate Failure.  So you can move forward.  Have you done deal analysis?  Do at least 5 then start making offers going forward.  Using your deal analysis do some failure or stress tests.

1.  Need a new roof

2.  HVAC goes out

3.  No tenant for 4 months

4.  Rental and occupancy rate is lower than planned.

5.  Tenant trashes property and you didn’t require them to take out insurance.   

Do each of these independently of each other and see if you can handle that failure.  Take away or analyze every reason for you not to do a deal this year.  You will fail.  Just make sure they are small failures.  Part of learning.  .   

Start small and Make Your Big Mistakes Early.