Chattanooga, TN · Member since 2017 · 7 posts · 5 votes
Hey BP,
Just checking in. I've been reading a lot about goals recently and it has me thinking, "As we grow, should our strategies and goals grow too?"
For a lot of us, our end goal in life is Financial Freedom. But how do we get there, and what RE strategies do we pick along the way?
I see that money is grown in three stages:
1. Acquire Capital
2. Grow Capital
3. Preserve Capital
As we move from 1 to 2 and 2 to 3 does it make sense that our strategies would change? For instance, at 1 maybe we flip houses, at 2 we invest in multifamily for cashflow, and at 3 we start looking at tax strategies as ways to structure our wealth to preserve it for the long haul.
I’m constantly seeing people say pick a strategy and stick to it, be a master of one, not a master of none. But should the strategy change?
Just a little discussion piece, comment below your thoughts!
I’m in the Chattanooga, TN and Memphis, TN areas if anyone wants to meetup for coffee and mastermind don’t be afraid to reach out!
Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
9y
Strategies should evolve for a number of reasons, not just because of your own evolution in RE investing. Market cycles also play a role. For instance, picking up single family rentals in Chattanooga may not be the best idea right now due to a rise in prices. Similarly, cap rates on apartments are being squeezed due to this market's emergence on more and more people's radar. You can still find good deals, you just have to work harder for them. Otoh, flipping right now is strong due to the lack of inventory, but again you face more competition for the same properties. It Really boils down to your level of comfort. I pursue a number of different strategies at any given time. That may not work for you, and that's ok as well.
Investor / Wholesaler · Nashville, TN · Member since 2014 · 1k+ posts · 667 votes
9y
@John Dunham, I agree with this. I have found that education and mindset was first for me in addition to your step 1. In my case it was a combination of my own capital and private funds that helped me get started. However, I have now moved on to some capital preservation and tax strategy to make sure that I keep a lot more of what I make as things grow.
Good topic, look forward to seeing what everyone else thinks as well.
Investor · Cleveland, TN · Member since 2016 · 280 posts · 187 votes
9y
I think strategy has to evolve as we grow. I'm in the "attempting to acquire more property" phase, so I'm willing to consider properties that cash flow. Cash flow is my number one metric right now. Once I've built cash flow and am financially free, my number one metric will be wealth preservation. My intention at that point, which is likely to change, will be to buy low cap rate/high appreciation properties. Less about cash flow and more about hedging against inflation.
I'd love to meet up for coffee some time and talk real estate. Feel free to send me a colleague request.
Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
9y
Strategies should evolve for a number of reasons, not just because of your own evolution in RE investing. Market cycles also play a role. For instance, picking up single family rentals in Chattanooga may not be the best idea right now due to a rise in prices. Similarly, cap rates on apartments are being squeezed due to this market's emergence on more and more people's radar. You can still find good deals, you just have to work harder for them. Otoh, flipping right now is strong due to the lack of inventory, but again you face more competition for the same properties. It Really boils down to your level of comfort. I pursue a number of different strategies at any given time. That may not work for you, and that's ok as well.