New Investor Tips for picking a investing strategy

There’s a lot of options for new investors and it can get confusing what strategy to use or put your time into. Below are a few different types of strategies and some tips about doing them.

1- Wholesaling - Many new investors want to start with wholesaling without spending any money. Wholesaling can be expensive on your own if you have no capital unless you’re willing to do the tedious work required. You can go on county websites and type in the information you’re looking for and contact owners. You can ask an escrow officer to help you or even partner with you.

You can even line up buyers and partner with other wholesalers to market their properties.

It’s a good idea when wholesaling to do your homework before sending out the property to investors. You don’t want to send out a property saying it has a 400k ARV and have investors see a 350k ARV when they look it up. That could cause them to stop taking your deals seriously. Same with rehab- if you have no idea how much rehab is don’t just throw a number on there. Just list what items need to be fixed or updated that you know about and tell people to get their own bid.

2- Flipping Houses- This is a great strategy! It’s also a strategy that can get you in a deep hole if you over extend your finances or get into a rehab you’re not ready for. For new investors it might be a good idea to find someone who’s local and flipping houses and ask them if you can come to the job site and learn. This can teach you how to bid a property, how to develop a rehab plan and how to deal with permits, issues that come up,etc.

For those wanting to jump right in it might be best to look for a JV partner who will lend you money for the deal and not require a monthly payment. It’s important to be fair to them and let them know upfront what your strengths and weaknesses are with the project. This can help you find the correct partner to align yourself with.

For the most part you should be okay if you do your due diligence. You should have an inspection done prior to purchasing and have the roof, ac and foundation looked. Have multiple contractors bid the job. Getting an ARV appraisal done is also a good idea. These are steps many experienced investors take.

Partnerships - This can be a great way to start. Try finding a local flipper and get to know them. Tell them you want to learn and come up with a plan. Ask them how much money they’ll pay you if you find them a deal. Call every broker, escrow officer, loan officer, appraiser, etc. around and let them know you’re looking for a flip. Let them know your situation and that you’re working for an experienced flipper who can provide proof of funds ASAP when a deal is found. The more people that know you’re looking for a flip increases your chances of finding one.

This strategy can help with gaining experience in finding deals, negotiating prices, lining up contractors for bids, etc.

Creative Rentals- This option allows you to buy a property and live in part of the property while tenants live in the other parts of the property ( a duplex or Fourplex for example, or a property with an ADU)

This allows you to have tenants help pay for your expenses on a rental property. Depending on where you live this could be a good option.

Rentals- This option allows you to purchase a property and have a tenant pay off your mortgage over time. It’s important to pick the right market as some areas it will be tougher to cover expenses than others. Looking into paying the home off in 15 years can be a good option. Imagine owning 5 or more properties that are paid off and producing cash flow.

This is also an option to do what’s called a BRRR and refinance the property using the equity built up if you purchased the property at a good price. Then you can pull your money out and have the tenants pay off the mortgage and use your cash to purchase another property.

These are just a few of the options available to new investors Looking to start out and make money in real estate.