Best Real Estate Strategies for 2023.... and why?

Question

I heard from someone that there isn't a bad real estate business, it's just a bad real estate strategy.
Considering the factors of inflation and rising rates, what do you think will be the best and worst strategy for this year and the next?

I hear a lot of folks making a move to the commercial apartments and even BRRRR are going to roar back.

But what do you personally believe would be the best and worst strategy for this year and the next?

Thanks! I hope to learn from you all.

Brad Jacobson · Answer

Like stocks or crypto, I simply "DCA" or dollar-cost average in by buying at least one rental every year.  I got spoiled to death with the equity booms in 2020-2021 but I could have never predicted that when I started in 2017.

As long as you're buying right and each unit has enough cashflow to sustain itself, it's always good to own real estate.  No bad strategies as long as you're buying with the right fundamentals.

Alex Ramirez · Answer

I am personally investing in commercial mtf and I believe that the demand for apartments is higher as people are not able to afford a house due to raising interest rates/inflation. You obviously don't want to invest in class A properties because those are the ones that struggle the most in a recession due to affordability reasons. I stick with the B and C class properties. To give you an example, I am currently doing the BRRRR on a 12plex and we are not even done with the project and already have a big waiting list of people wanting to live there. Mtf is a recession proof investment. One thing to note is that you should never buy hoping the property will get appreciation with time. Always buy for cash flow. Best of Luck!

Mike Jensen · Answer

Depending on your local rules, I see commercial office , retail , as being candidates for conversion to multi family. Here in CA we are now able to build second and third dwellings in many cases despite what HOA and Set Back requirements are.  My commercial building i was trying to do Mixed Use business on ground floor, apartments on top.  2 yrs ago the city made it painfully expensive. Met with them a week ago and they backed down on some of the expenses like forcing me to add a fire hydrant for example.  Point is, I feel like there is a window where in the right place it might make sense to convert some previous commercial uses to residential as more and more businesses are able to operate remotely.  Just my small picture of things.

Carlos Ptriawan · Answer

i love today's environment, there're just so many deals. Invest in CD-saving-investment is having 4,5,6% and higher return.invest and living in flip in luxury property is just dream come true with that house crashed, it's like every week or so I saw quite a good deal.

Steve Vaughan · Answer

Old school solving seller's problems creatively to capture equity at the buy for long term rentals.

Flips and STRs only if can still work as long term hold if needed.

Carlos Ptriawan · Answer

in high interest rate environment, debt investment offer highest reward/risk ratio. lowest reward risk is investing at syndication multi family with floating rate options. for direct investment, living in flip with combination of BRRRR and holding time of 4 years seems easy money making strategy.

Paul De Luca · Answer

I think all strategies (BRRRR, flipping, house hacking etc) can work in any market if you execute properly. But I do agree that there are times when some strategies are lower risk or more effective than others.

I think house hacking and traditional buy and hold is a good hedge against inflation and interest rate risk. Shorter term investing strategies have more risk with all the volatility that has been happening.

Matthew McKee · Answer

lot of pain in the market for sellers, solving their problems with subject to (OWC) is a very lucritive and viable strategy right now.

Ricardo Hidalgo · Answer

I think building good short term rentals and multi family projects for 2023 as the materials become cheaper and prices settle would be a great option. By the time you are done building you will be towards end of 2023 or start of 2024 which could offer better rates or a closer end to the recession. I am seeing new construction hold better value than flips or older inventory.

Best Real Estate Strategies for 2023.... and why?

Most Popular Reply