Quote from @Katlynn Teague:
When you start investing in real estate how do you go about picking a strategy? Are your end goals the biggest decision maker when deciding wether you want to fix and flip, use BRRR, buy and hold? After deciding your strategy when walking a house, what are you looking for to see if that house aligns with your goal? From what I know, comps and days on market are a big deciding factor when it comes to fix and flip as well as rental properties. With investors that buy and hold what to you access? Are you looking for potential growth in the area in upcoming years?
Thank you so much for taking the time in advance to answer my questions. I look forward to learning from you!
Very good takes here on this thread @Matthew Kwan @Carlos Valencia
I think whether you're looking to approach real estate as an investor (owner operator) or as a business or active cashflow (operating business like flipping/fix/turn keys/wholesaling/RE agent/broker/lender/etc) it will vary some of the replies here are from people operating businesses and some are from BRRR/House hack investors who are starting out.
Somewhere in between will lie your fine balance between both.
For myself i've generated earnings and income through lending and have reinvested them into real estate in a market with rental income and value upside by buying lower than "as is," or intrinsic value when I can and improving that value through upgrades, rental raises, and added services. Sometimes there is only so much you can do to the property to add so as a secondary acquisition goal we'll acquire locations that are key long term locations in strong markets that will have a competitive advantage in different market cycles even if the advantage isnt "pronounced," right at this moment (beach,lifestyle, transportation, education, path of progress, city initiatives for development, and etc areas).
The active business, in your case (real estate agent) or lending can fund the investing into the future while you work on freeing yourself.
The highest expense most people have is their housing expense so it makes sense to house hack early on in the game for many who have W2 jobs or are sole practitioners/gig workers. This eliminates your main expense, then the second highest expense usually are taxes, and especially so if your income gets past 100k. This is where real estate comes into play to help offset the active incomes through STR loop holes or being a RE pro. Theres many advantages that these strategies can play in eliminating all or most of your fed/state taxes.
After this stage where you've eliminated or covered your housing and tax expenses its all "gravy," just keep rinsing and repeating till you reach your desired cashflow goals or net worth goals.
The next stage that will come into play is stabilizing your cashflows and asset protection strategies because things arent always so stable month to month with real estate and keeping things going smoothly takes a lot of good people on your team along with processes and systems. Asset protection strategies come into play as well but its good to plan with the end in mind (use of entities, ILIT's irrevocable life ins trusts, friendly loans, trusts, etc).
Hopefully thats a good high level overview.
