Real estate investing in my opinion is one of the surefire ways to generate long-term wealth! There are so many niches within real estate one can enter to start generating huge profits.
If you're exploring the idea of becoming a full-time or part-time investor, here's a few things to consider before getting started.
Can you set aside an hour or more a day towards your real estate education? Being able to set aside time to further your education is a must...especially if this is new to you! I've got you covered, not to worry...I'll assist you with selecting the right niche for your backyard, time, and budget.
Financial resources...reserve capital or private money. Aside from time, you need capital to pursue your real estate endeavors! Don't let lack of capital derail your goals and aspirations though. You have tons of options!
If you're strapped for cash, or working with a limited budget, they're still avenues you could explore. I'll discuss those later. Right now, I'd like to discuss...profit centers.
Now we'll break down each tier!
Are You Ready?
Let's get started...
These 4 profit centers can be successfully used in your business model!
Here's a breakdown of the 4 real estate investing profit centers:
*Wholesaling / Quick Cash
*Lease Options / Cash Now and Later
*Rehabbing / Large Checks
*Buy and Hold / Wealth-Building
Now let's break down what the four profit centers can do, and how they can be successfully used in your business; not only that, but also how, if you treat the four profit centers correctly, you will start to see that you're building wealth over time!
By starting with profit center 1, moving to profit center 2, moving to profit center 3, and then moving to profit center 4, which is ultimately the wealth-building process in the four profit centers.
Profit Center 1: Wholesaling
Wholesaling is by far one of the easiest models to get into, it allows you to generate quick cash right now if you have limited capital or challenged credit!
This is one of the models that I still use to this day, it provides cash for my partners and I on a monthly basis.
The wholesaling process of real estate is truly the beginning stages of any creative real estate transaction. This is simply where you assign your rights to a contract to a new buyer who is in a position to close quickly!
Some investors may tell you cash buyers are difficult to find! That is far from the truth...there are plenty of active real estate cash buyers in today's market.
The investors that are buying in today's market, are really the people whom are prepared for long-term holds. Typically, these buyers are most commonly landlords and cash buyers. Cash buyers are buying to close quickly for rehabbing and resells.
Landlords are buying to close on properties for their portfolio's. I highly recommend that you go after these two types of buyers: landlords and cash buyers.
Their just waiting for you to reach out to them! I will show you how to contact these buyers in your local market.
Profit Center 2: Lease Options
Look at Lease options as a "cash now and cash later" strategy. This is one of the most unique approaches to real estate investing! You can benefit from lease options, if you have challenged credit. Ultimately, you'll just need a small deposit to secure the property, to acquire a lease option.
Unlike wholesale deals, a lease option deal does not have to be as discounted! Ideally, you'd like to secure a property with 5-15% of equity, so that you can then go in and lock up the property on a long-term lease.
Then you will eventually put in a tenant buyer who will close on the property at a later date. If you went with a sandwich lease option, you're going to get paid up front, with an "Option consideration Fee."
The other advantage of a lease option, is that you get paid on the back end of the deal! At the end of the transaction, you're in a position, now, to allow the tenant buyer to close.
So, whatever you agreed to buy the house for, and the amount you agreed the tenant buyer to purchase the property for, that spread is now yours as profit!
Keep in mind, with this strategy you're helping people from all angles! You're helping the seller, yourself, and the first-time home buyer.
Remember this, though. A lease option deal is only going to work if the seller is feeling a "payment pain." That means they're not able to make the payments, and the property becomes a burden. This is where you will succeed as a lease option specialist.
Profit Center 3: Rehabbing
Real estate investing through rehabbing for large checks is by far one of the greatest ways to quickly reach success as a real estate investor. Now, I'd never encourage you to go out and become a rehab investor right away!
There are some skills, knowledge, and a power team, that need to be put in place; to achieve success as a rehab investor. Rehabbing usually goes over budget. It seldom goes under budget from my own experience.
There's always something that we call a "Hedge Factor," and it's typically about 10-15% when you're first starting out. You can move that hedge factor down to 5% once you've gotten a few projects under your belt.
You may want to go out and find an expert, that's willing to help, and partner with him or her to get started. However, you're going to have a bit more risk involved in rehabbing, than you would just wholesaling or lease optioning. Let me just add that the reward is far greater though!
If you're interested in partnering with my network to take your real estate education and knowledge to the next level, we'd love to hear from you!
Let's continue with what we were discussing!
Let's say for example you bought a house for $40,000, and the market is $80,000 in the middle, but on the high end it's at $100,000, you can take that $40,000 house and remodel it to the high end.
You can even come in and add an extra bedroom or an extra bathroom, which will push that value even higher because you're doing what's called "forced appreciation."
Rehabbing is obviously a Tier 3 model that we call when you're out there and investing. You want to make sure that you're at that level to do that. Tier 1 would be wholesaling. Tier 2 would be wholesaling and lease optioning.
Tier 3 would be wholesaling, lease optioning, and rehabbing. It's imperative that you know where you are when you're getting started!
Profit Center 4: Buy And Hold
Buy and Hold is a wealth-building model. This model is the ultimate goal!
When you get to this model, your life will change forever. It takes all of the other three profit centers to get to a Tier 4 investor.
As a Tier 4 investor, you are now using the income and resources from your other profit centers to acquire properties that produce cash flow. You can start to build wealth, and create passive income over time, to walk away from your job!
As you can see, it's imperative that you have an understanding of the four profit centers, as you embark on your real estate investing journey!
Seek and ye shall find! One of the best ways to get out there and start investing is with a mentor!
How do you know who's going to be a good real estate mentor? Some one with:
In my opinion, real estate mentorships are one of the most overlooked aspects of business. Let's put things in perspective, the fastest way to achieve the results you desire, is to find a mentor whose reached this level of success.
MENTORSHIPS: EXCHANGED BASE
People often think mentorships are based on money, but they're really all about exchange!
This leads me to the second way to kick start real estate investing, and expanding your real estate education...
2. REIA's (Real Estate Investor Associations)
A REIA is a gathering of like-minded professionals, who are actively investing in real estate. They are mindful of the laws, best practices, and have valuable experiences to impart.
Joining a REIA is a great way to network, create business relationships, and potentially find a mentor.
Would You Like A List Of National REIA'S ?
3. Real Estate Education/Partnership ( Partner With My Network )
My partners and I are always open to mentor fellow real estate investors. We know how hard it is to get started investing in real estate, so we crafted a core curriculum/partnership to ensure your success.
The core curriculum was developed to give each mentee/partner essential concepts and mechanics for real estate investing.
Aside from the Core Curriculum, you'll also be privy to:
13. Money For Real Estate Investments
We offer the flexibility to learn in two ways! We have an online video class room, which allows you to learn from the comfort of your home. You also have the option to attend live class training as well.
In addition we offer:
and so much more!!
Our primarily goal is to help you achieve the level of success you desire. To get additional information about our real estate education and real estate partnership, please fill out the form below.