Congratulations on getting clear on your goals and resources!
It is the first major step in executing a plan to achieve what you really want. Next is choosing an investing strategy or strategies that are in alignment with your goals and resources.
The pitfall a lot of investors make is pursuing investing strategies that are not in alignment with their goals, resources, and just how they would like to play in life. To help you avoid spending valuable time and resources I have compiled a listing of investing strategies that align with the goals and resources that I introduced in the “Hacking Your Investing Goals to Start Investing Confidently Today”.
Before we get started please note that while personal experience is not always necessary for you to have in order to get started I truly believe that you should take the time to get educated on the strategy that you have chosen. That education can come in the form of books, podcasts, courses, or working alongside an experienced investor. Education is the baseline – don’t skip it. Once you have your bearings then taking action is necessary to build on and to further develop your experience and continuous education. We are always learning and that is what makes this a fun, challenging but also deeply rewarding path.
So let’s get started:
- Cash
Here are the investing strategies that have the potential to get you started in the game with little to no money down:
- Buying properties using Seller Financing
- Wholesaling properties
- Buying and holding single-family homes or residential multifamily
- Buying properties to flip with hard money lender’s cash
The strategies that may require cash to get started are:
- Tax liens (Less than 5000 to purchase)
- Hard Money Lender
- BRRRR – Buy, Rehab, Refinance and Repeat
- Passively Investing in Syndications (Between 25,000 to 50,000 are the minimums generally)
- Notes Investing (nonperforming notes are generally cheaper at approximately 10,000 to 15,000)
- Airbnb
For these strategies, the cash can come through partnering with other team members:
- Commercial Real Estate Investing
- Joint Ventures
- Actively Investing in Syndications
- Development Projects
The above is not set in stone but rather a guide. Keep in mind that using other people’s money (“OPM”) or other types of creative financing is always possible.
- Time
Across the board, some time is generally needed to get educated in order to protect your hard-earned capital. The amount of time you will spend on education will of course vary based on the investor and their chosen strategy.
However, this section seeks to highlight the ongoing amount of time needed after the baseline education.
The strategies that require lower day to day time commitment are:
- Passively Investing in Syndications
- Tax Liens
- Hard Moneylenders
- Buy and hold Land Investors
The following strategies require some time day to day time:
- Notes Investing
- Time commitments hinges on whether you are purchasing nonperforming notes versus performing notes. Nonperforming are cheaper to buy but will require time from you to help it perform again.
- Buy and Hold Turnkey Single-family homes and residential multifamily
- Through the use of property managers, you can largely decrease your day to day time commitment.
- Buy and hold Commercial Real Estate Investing & Joint Ventures & Actively Investing in Syndications
- The time commitment of the asset management partners on the team is needed to manage the property manager and the asset to ensure it performs and to make adjustments as needed.
- Development Projects
- Time intensive for the development team
- Wholesaling
- Airbnb
- Can be time intensive for the turn teams depending on the system implemented.
- Tax Benefits
Believe it or not – not all real estate investing strategies provide tax benefits. Here are the ones that do not provide tax benefits:
- Tax Liens
- Hard Money Lender
- Buy and hold Land
- Flipping
- Notes Investing
- Wholesaler
- Airbnb arbitrage (This is where you Airbnb leased properties)
- Appreciation
These are the strategies that don’t set out to provide investors with any appreciation:
- Tax Liens (If you end up with the property then potentially yes)
- Hard money lender
- Notes Investing (If you end up with the property then potentially yes)
- Wholesaler
- Airbnb arbitrage
Keep in mind that there might potentially be no appreciation in other strategies such as buy and hold and others if you are buying in a market that does not have the population, job, and income growth. Investors might choose to buy in these locations for the potential for stable cash flow and not for appreciation.
- Experience
As noted at the beginning of this article you don’t necessarily need personal experience in order to get started on any of the strategies but you do need to get educated to you understand and know what you are doing. Secondly, you can use partnering and creating teams to get started in any of the real estate strategies faster than attempting to do everything on your own.
- Landlording
Yes, it is possible to invest in the real estate space without being the point person to deal with tenants, termites, and toilets. The following investing strategies will keep you far away from these 3:
- Tax Liens
- Hard money lender
- Passively Investing in Syndications
- Buy and Hold Land
- Note Investing
- Flipping
- Development Projects
- Wholesaling
All the other investing strategies have a high probability that you will have some landlord duties. Utilizing a property management team can help to decrease the level of activity you might have to face on a day to day basis.
Conclusion
That completes the investing strategy to investing goals and resources match. Once again I recognize that it is a lot of information. Hence, feel free to reference this document in the future and take your time digesting it as you continue to grow through this process. Remember nothing is set in stone and the key is to think creatively about your goals, resources, and investing strategies. As real estate investors, we are problem solvers. We are constantly striving to solve problems more creatively each time!
Want to Invest with Lisa?
If you are interested in learning more about passively investing in apartment buildings, click here https://lisahylton.com/partner-with-lisa/ to sign up to learn more about upcoming opportunities.
About the Author
Lisa is the founder of Axcel Capital, a real estate company that invests with investors solely multifamily investments across the United States. At Axcel Capital, Lisa and her team focus on buying apartments with investors and shares the profits. This strategy enables her investors to build wealth and passive income through investing in conservative, high-quality multifamily assets.
Lisa is the host of the Level Up REI podcast where she interviews real estate investors on their stories and lessons learned. After a decade of working in the financial services industry, Lisa found investing passively in real estate syndications and was intrigued by the business opportunity to invest in real estate while also providing the opportunity to others to do the same along with her.
You can learn more about passively investing in high-quality multifamily assets that provide cash flow and strong returns at www.LisaHylton.com.
