Choosing My RE Strategy

[Chad Hack]

Hello everyone and Happy New Year!

I've spent the last 6-9 months immersing myself in the BP community, listening to podcasts and reading recommended books. I've even attending the One Thing Goal-setting retreat, and worked through many mindset topics. However, I'm struggling with deciding WHICH strategy to pursue. Everything from SFR to STR to Self-Storage sound exciting and potentially lucrative to me, and fit my personality well. I want to purchase my first property within Q1 to get in the game, but I would like to head down my chosen path rather than switching gears all the time. Any hints on how to choose the actual RE strategy that will suit my needs? I'm in my mid-40s, have a global role in the corporate world, and my wife and I will already be fortunate enough to retire early through stock investing (~10 years). In other words, I'm in a different stage of life than when I was 20-25 so I'm not interested in house hacking at this point. What are some criteria I might use to filter various strategies so I can feel confident about my chosen path even if I pivot later? Finding my WHY has been difficult. Much appreciated as always.

[Jim Pfeifer]

You have gotten some great feedback. I would add that the first thing you want to decide is if you want to be active or passive - and there are degrees of each. You have a full time job, so I assume you can't be completely active but that is something you need to determine. I have done STR's, turnkey SFH and small multifamily and had a W2 at the same time. I tried to make these investments passive - they were decidedly not passive. Managing a property manager is active as is finding someone to rehab or repair properties - in my view it is very difficult to own properties AND make that a passive investment.

I switched to investing in real estate syndications - they are very passive, though there is an active component.  The active part is finding and screening sponsors and analyzing the deal.  Once you send the wire, it is very passive and the only thing you are doing is collecting distributions, reading reports and getting updates from the sponsor.  The active part - prior to the investment - can be done from your computer at home.

With syndications, you are hiring an asset manager to manage the property including the property manager, rehabs, overall strategy and everything else.  The asset manager is a full time real estate professional rather than someone like me who was a part time asset manager.  My returns on my syndication investments are as good or better than my previous active/passive investments.  I think if you are going to be a full time active investor, you can probably beat the syndications, but if you are trying to do this while working a regular job, it can be a challenge.