Real estate is widely regarded as one of the most lucrative investment vehicles to include in your financial portfolio. Truth be told, there are many unique strategies for making real estate investments. Real estate investment strategies are typically focused on the long-term and they require intensive research, methodical planning, and careful budgeting.
Investments can be geared towards deriving rental revenue streams, ROI on real estate sales, or simply building up a substantial retirement portfolio. It is certainly not an easy undertaking to get up and running in the real estate market. Whether you’re speculating on a property, rehabilitating a property, or living in a property that will later be rented out, you must conduct the necessary research to make things work.
With all the complexities involved in real estate, it’s always a good idea to consult with a real estate expert who walks the walk and talks the talk. These folks understand the intricacies of real estate transactions, sales and marketing, budgeting, and careful selection of properties. One of the most exciting investment strategies used by leading gurus is BRRRR investing. This acronym describes the act of buying, remodeling, renting, refinancing, repeating.
An ardent supporter of this technique is real estate mogul Ofir Eyal Bar who went from zero to hero through hard work, education, careful selection of investments, and a laser-sharp focus on the projects at hand. This strategy is ideal for setting up a portfolio of rental properties without putting yourself under too much financial pressure.
Ideally, this strategy should be used early on in your investment career. You can leverage your assets by purchasing a property, rehabilitating it, renting it out, and then refinancing to get a lower mortgage interest rate, and purchase another property. By repeating this process, you are getting other people (including banks and mortgage brokers) to help you secure your assets while renters pay down the monthly cost of your assets. Careful budgeting is sacrosanct. Many first-time investors don’t have deep pockets.
It’s hard enough coming up with the down payment to secure the best possible mortgage rate without being penalized with points. It takes time to save up the deposit amount, and it may require significant sacrifices to get there. Once you’ve got the funds, and your tax returns look healthy, you can make your down payment on your investment and secure your mortgage. Many experts point to ‘side hustles’ as a way to get more income together for your down payment.
What Should You Invest in?
There are so many different types of real estate investments you can make. It’s not a one-size-fits-all approach that you should be following. You can go the traditional rout and purchase a property that you want to live in. Be prepared to go through listings, and more listings, and more listings. It’s a tedious process because finding the right property is essential to your financial well-being and your emotional well-being.
At this point, you’ll definitely want to enlist the services of a credible realtor. Find somebody you can trust. You certainly don’t want to be sold down the river by an unscrupulous realtor seeking to maximise their commission off your hard-earned money. Work with a realtor who is prepared to work with you and your budget. Be upfront about what you can afford, and what you are looking for.
You can invest in any number of properties including vacant lots of land, business real estate, overseas real estate, rehab to rent real estate, and more. By now, you’ve figured out that your budget is the most important resource in all your decision-making processes. Carefully structure your budget to reflect your real estate goals. There are fixed fees, hidden fees, unexpected fees, and maintenance fees that you will have to take into consideration.
Your budget must be able to sustain these costs. Housing markets tend to appreciate over time, but as we have learned from the global financial crisis a decade ago, anything is possible. You may be surprised to learn that you don’t have to shoulder all of the financial burden on your own. Various crowdfunding options, consortiums, and investment groups are prepared to go in with you if the real estate purchase shows promise.
It Takes Time to Grow in Confidence
Property investments are laden with regulatory constraints, intricacies, and acquired skills. Not only do you need to learn how to negotiate with buyers and sellers, you also need to have a firm grasp of sales and marketing techniques to become successful. Fortunately, the real estate market is peppered with enough professionals to help you navigate your way around.
It’s important to build trust with the right team of people, including contractors, realtors, lawyers, and business consultants. Ofir Eyal Bar employed all of these techniques to become a real estate tycoon. He purchased properties in good locations, rehabilitated them, and rented them out. This process continued throughout his investment career, helping him to amass a substantial portfolio of investments. Throughout it all, he stresses that you cannot expect overnight results. If you go in all guns blazing, with no budget and no plan, only one outcome is assured.