Zoning In on a Niche?

[Frank Matanane]

So as I am learning through the forums and the Ultimate Beginners Guide To Real Estate Investing I need to focus in on a niche and master that...

That is proving to be a little more difficult than I thought. In the beginning I thought wholesaling to start for sure, but fix and flip became a bit more enticing, now buy and hold is tugging hard on the mind. I'm a beginner trying to absorb as much as I can and have yet to close my first deal. How would you suggest I narrow this down so I can focus my education on that niche? Should I focus on generating capital first with Rehabs then look start looking at rentals? 

Thanks in advance

[Jim Pellerin]

There are a few things to take into consideration when choosing an investment strategy. Time, money and risk.

1. By time I mean whether or not you have enough time to be an active investor or do you just want to be a passive investor.

2. By money I mean how much capital you have to invest or access to.

3. And by risk I mean how much risk are you willing to take.

Then you can look at the 4 main investment strategies.

1. Buy, Rent and Hold - You need money or a joint venture partner with money. You will have to manage it, or hire a Property Management company. But these types of investments are moderate risk, if done properly.

2. Fix and Flips - Again, you will need money to purchase and renovate. But you can always do a joint venture. Flips can take a lot of time if you are managing the work yourself, but you can hire someone to manage it. These are very high risk investments if you are just starting out and don't know what you are doing. But they can be the most lucrative, if successful.

3. Wholesaling - Buy low, sell higher. Basically, flipping without the renovations. This doesn't really require a lot of money if you are just putting properties under contract and assigning them. You can spend as much time as you want on these but it is a very active strategy. If you stop working, you stop making money. Nothing passive about it. The only risk s that if you don't assign the property, you would lose it. 

4. Lease Options - Specifically sandwich lease options. You don't need any money to acquire a property from a motivated seller. Again, you can spend as much time on this strategy depending on how much money you want to make. But if you stop working, the money runs out, so it's not passive. There is medium risk because you are managing a property and your are subject to something happening with the owner and the buyer.

You can make all of these strategies more passive by hiring people to do all the work. And you can implement all of these strategies with no money using joint venture partners.

The last thing you could do is just become a private lender if you have lots of capital. Not much time required and minimal risk since the investment is secured.