What are your REI Strategies & how do you implement them?

[Karla Yudy]

Hi all,

I think this could be a fun topic and informational for many. Anyone who wants to is welcome to participate :). The fun thing about real estate investing and why many of us got into it in the first place is that there are a wide range of investment strategies. The idea is to share (and be as detailed and thorough as possible) the investing strategies that you currently use. State how many deals you have done so far in 2017 and what type of deals. Also, include the part of the country you are in, as obviously different strategies can apply for different regions (example, it's difficult to invest for cash-flow in California, currently). Anyway, I'll start:

I'm in the Triangle region of North Carolina: I have done all different types of real estate deals (wholesaling, rehabs, buy & hold rentals). So far this year I have completed 8 finished deals (where I bought and sold/bought and stabilized) and have 4 more currently in the works. I would say my main focus in order is:

Wholesaling: I search extensively for properties that I consider to be under valued and put them under contract and either assign the contract or close on them myself and then re-sell them on the open market (can also do a double close instead of an assignment if you have a buyer lined up before you have to close). IMO, the trick here is finding the properties. This is (or at least can be) A LOT HARDER than it sounds (again, IMO). I use a ton of different strategies but most of my strategies focus around letters. I've also bought pre-foreclosures, stuff off MLS (anything good you have to be VERY quick - very hard in today's market). Of the 8 completed deals, 5 that I have done have been wholesales. I've made offers on well over 100 properties in the past year.

Rental Properties: My personal strategy for rental properties may differ from other rental property/cash-flow investors. I look for rental properties that I consider to be undervalued in areas that (IMO) have high chances for future appreciation. I don't care so much about the cash flow (initially) as I do about making sure that I am getting what I consider a discount on the property. Just as an example, I bought a 2-unit early this year for $125,000 that is only getting $850/month in rent. It also appraised for $20,000 less than my contract price. Obviously, on paper that doesn't look like a sustainable model, but I am confident I could sell it for at least $150,000-$160,000 the day I closed, so I didn't care too much what the appraisal said or what the current cash flow was. Currently, I own 4 rental properties (3 of which I acquired so far this year). Of the 4 I have, one I bought for $102K and it appraised for $164K the day I closed, and is probably worth $180-185K now (would probably have to throw a couple KKs to 'freshen' it up to get this price), another one I bought for $127,000 and it appraised for $155,000 the day I closed. I feel confident I could sell it for $190,000-$200,000. This is a combination that I bought it at a discount and the area has appreciated greatly since I bought (again, part of my strategy and I have certain reasons why I look in certain areas). The third rental I bought for $91,000 and it would no doubt get at least $125,000 today, as well as the one I already mentioned. I've bought all my rental properties with traditional bank financing.

Rehabs: I have two rehabs currently under progress. Personally, given the choice between wholesaling and rehabbing I much prefer wholesaling if I can make a decent profit. Sometimes, I find properties that the margins are just too slim to wholesale but they still make a decent deal. As my main investment strategy is finding under-valued properties, once I find one than I can decide what to do with it. The 2 rehabs I have currently the margins were just too slim to wholesale, so I found a partner who managed the rehab and we put up $ 50/50. For the first one, we bought for $86,000, put $16,000 into and currently have it under contract for $130,000, closing in ~3 weeks. After some closing costs, we'll probably each pull $12,500 or so. The second one we just closed on, and haven't started the work yet, but we paid $81,000 for it. It probably needs $20,000 and we will list it for $145,000-$150,000. Obviously, if I had to use hard money those #s would change significantly. That brings me to another point that is fundamental to my investment strategy: get access to cheap $. I have a credit line for almost $100K which allows me to buy properties like this at relatively cheap $ (~6.5% interest). I can get the $ in 2 days and close on deals and market them on the open market as well, instead of worrying about having to find a buyer to close simultaneously or exposing my contracted price and opening myself up to getting negotiated downward by buyers/other investors. 

What about everyone else? What are you guys focused on? What RE investing strategies are you currently employing? How do you find your deals?