There are various strategies that you may learn in real estate investing
The current pandemic causes historic changes in the U.S economy. In the first quarter of 2020, consumer spending, which supports 70% of the economy, seems to be in halt. The mobility of people is regulated to prevent the spread of the virus. The interest rates are cut to almost zero and huge stimulus packages are launched as government’s initiatives. Due to these changes, it may be wise to invest your money in opportunities that may increase its value.
Economic effects of the crisis
Most economists are preparing for post-pandemic inflation. Shutdown policies were implemented across the countries. The unexpected changes left the economy on temporary freeze. Some businesses stopped their operation and laid off employees. The production of goods and rendition of services slowed down due to restrictions in transportation. These factors necessitated the passage of stimulus packages and printing of money.
Turning crisis into opportunity
Real estate market opens a good investment opportunity despite the presence of a global crisis. The ATTOM Data Solution U.S Home Sales Report shows that home sellers realized a gain of $75,971 on the typical sale despite the coronavirus outbreak. The result represents a 36.3% return on investment compared to the original purchase value of 34.5% in the first quarter of 2020. Real estate investing may be a good avenue for you if you think long term, subject to your due diligence. Here are the 4 strategies in real estate investing that you may want to explore:
No. 1: Fix-and-flip
Fix-and-flip is the method of purchasing a property, fixing it through renovation and repairs, then selling it for a more valuable price. It is a profitable business strategy as long as you are using the proper cost-effective analysis in dealing with your subject properties. It is highly-suitable in houses of range conditions, whether distressed or slightly used.
In the second quarter of 2019, the total volume of houses flipped in terms of dollars reached $8.4 billion. A study concludes that Texas is a top area in flipping properties. Austin, Dallas-Forth Worth and San Antonio were included in the top 5 markets with the highest percentage of completed flipping projects out of the 53 Metropolitan Statistical Areas (MSA). You may see the competitive performance of DF-W in the real estate market in our hot trends blogs.
No. 2- Rentals
Rental strategy is preferable to investors who want a fixed source of income. Here, you will keep the property either in long-term or short-term period, subject it under the lease, and rent it out for a fee.
Home rental is in demand to many people, especially to family. The 2019 Rental Affordability Report shows that renting a three-bedroom property is more affordable than buying a median-priced home in 59% of the counties. The study also reveals that rental is more popular and affordable in most populated counties including Los Angeles County, California; Cook County Chicago, Illinois and Harris County Houston, Texas.
No.3 : Bird-dog strategy
Bird-dog strategy describes a hunting dog looking for prey of birds shot by the hunter.
In real estate, it refers to a person who searches and looks for clients, properties, and motivated sellers and locates them for investment proposals.
It means finding properties for purposes of reselling the same to a better price. In wholesale contracts, you need to negotiate a price with the seller and sell the properties for a higher price with the buyer.
The Common Denominator
The common denominator among the strategies is the need to have an in-depth negotiation and marketing skills. Engaging in real estate investing requires making an assessment, talking to clients, preparing a market value analysis, persuading buyers, and closing a deal. These tasks are surely time-consuming but will definitely prove its worth.
How to get started in less than a minute?
As the No. 1 in Deal Finding, Real Estate IQ is ready to equip you with the investment tools you need to get started. Whether you are engaged in bird dogging, wholesaling, fix-and-flip, and rentals, having a database of information and leads will surely help you to penetrate the market. Feel free to check our automation tools below:
Deal Analysis Suite – Use live MLS data to quickly and easily run your own CMA/comps
Deal Finding Suite- Have the most relevant data and know-how to interpret it with a click of a finger. If your marketing strategy involves phone calls, texts, or emails, try also our Premium Deal finding suite and receive top off-market lists done for you!
On-demand skip tracing- Send a list of addresses and our tool will do the skip tracing, and will instantly return your list with email addresses and contact numbers.
You may also join our community where partners and investors are helping each other grow. Feel free to be part of it!
Luke Watkins is a real estate investor with mastery of fix-and-flip and wholesale deals. His experiences include working with some of the biggest residential flipping companies in the country with a monthly average of closing 20 to 30 deals. He also has a background in construction and property management; and has invested in Salt Lake City, Utah, Indianapolis, Indiana, Albuquerque, New Mexico, and now Dallas, Texas.
https://www.attomdata.com/news/market-trends/home-sales-prices/attom-data-solutions-q2-2020-u-s-home-sales-report/ ; https://www.attomdata.com/news/most-recent/attom-data-solutions-2019-rental-affordability-report/
Disclaimer: The blog articles are intended for educational and informational purposes only. Nothing in the content is intended as legal or financial advice.