What Strategy Do You Have In Place?

[Account Closed]

Seeing It Correctly:

How many of you are utilizing a solid strategy for taking investment action? I don't mean BRRRS or flips, or even rentals. I mean, what is the strategy that is earning you more rental income and helping you get to your financial goals? The method of "get property and collect rent" that most of us use is just that, a method. A strategy allows you to not only plan your real estate investment growth it gives you the ability to track it. 

The Problem:

I used to believe that you could hold on to a property and get "rich", for many back in the day, it worked, and it worked well. What changed? The honest answer is that there is more access to what we didn't know then; everyone and their mother is a "real estate investor," or so they thought. See, collecting rental income is solid, but only if the market around you is going up and you can collect more rent over time and experience greater appreciation in value. Many of you find the markets where that is already taking place and purchase what you can with what you have, which in most cases is 1 or 2 homes that you hold for 5-10 years. By doing this, you continue to increase the price of housing and rentals and ultimately eliminate yourself from being able to participate in the market. You may have sold your homes for an "amazing" profit of 10%-15%, but that won't be enough to enter back into that market. This is called the primary market effect, where everyone flocks to one place to invest, thus increasing the cost of literally everything in that market, and they price themselves and others out of the market entirely (usually the middle-class and the first time investors). 

The Solution:

Invest strategically, not methodically. While I am a big fan of the owner finance BRRR, I don't singularly rely on it as my income method. it would be silly to think one form of an asset could give me all the money I need for my lifestyle, yet that's how most people approach real estate investing. By implementing strategy, you can increase your COC (Cash on Cash Return) by 10%, simply by utilizing asset diversification in the SAME area as your current assets. That last part is extremely important because many people will buy single-family in one state and then commercial in another. The one practice I use in all of my and my clients' investments is Neighborhood Reinvestment, allowing us to guide real estate growth and cap the ceiling on pricing so that there is no outside influence that causes uncontrolled growth. The moral of the story is that, if you want to keep up in this new age of real estate investing, you're going to need to start using the tools that others won't.

For those who would like more info on this, please feel free to connect with me on Bigger Pockets, LinkedIn, or by email.

Thank You!