What is Hybrid Real Estate Investing?
Hybrid real estate investing is a ‘hybrid’ of the tried and true models of Buy & Hold and Fix & Flip. Investors get the high returns of an active investor plus the tax benefits, cash flow, and appreciation of a passive investor. It’s a short-term (1-3 year) investing strategy where people who want to buy a home and cannot currently get traditional financing are thoroughly screened for eligibility. If they qualify, they choose a home, and an investor (or group of investors) buys it. The tenant-buyer pays rent to the investor and lives in the property until they are eligible to get a traditional loan and buy the home from the investor (rent-to-own aka lease option). Another option is to sell on a Contract for Deed (seller finance aka land contract).
Comments (2)
This sounds pretty awesome! So could you basically do multiple deals every couple years then this way?
Jesse Mills, over 2 years ago
Totally! For round numbers say that instead of putting down 20% for an investor loan per property and locking up that money, the investor gets money up front from the tenant-buyer before closing. If they bring 10% then the investor only has to bring 10% net. Which allows them to do twice the amount of deals. Then when they purchase in 1 to 3 years the investor can do it again and get money up front, cash flow and a back end pay day when they sell at the appreciated agreed upon price. Rinse and repeat.
James Brown, over 2 years ago