Do You Focus on a Particular Investment Strategy?

Do You Focus on a Particular Investment Strategy?

When you start investing in real estate, how do you decide where to focus, what to study? Naturally, you can’t learn or become skilled in all the strategies and investment areas at once. So how do you start?

For us, single family houses were our primary focus, and that’s still true today. I started there because that was what I knew. I lived in a single family house, had for most of my life, and most of my family and the people I knew lived in single family houses. It seemed like the natural place to start learning. I already knew quite a bit about houses, like most of the parts that go into one and how long a roof or heating and air system should last.

But perhaps you have another area that you’re familiar with. Some investors love mobile homes or mobile home parks. When I ask why, they say that they have lived in mobile homes or a family member invests in them or some other reason why they are familiar and comfortable with that investment strategy.

When you do pick a strategy that is of interest to you, study and learn that specific strategy until you master it. Add more strategies as you go. It helps keep you from becoming so overwhelmed by all the choices real estate offers.

Another variation is that we started out by focusing on neighborhoods, areas where we wanted to own, rather than on a specific type of investment strategy like foreclosures or probate. Because we focused on a few geographic areas rather than on a specific strategy, we became skilled in many buying strategies.

Why? Because with marketing, you never know who is going to call or what type of deal you’re going to run across. Our goal is always to present an offer, a solution, to anyone who comes to us. If you focus on just one strategy – like foreclosures, wholesales or probates – too many deals come to you that you have to pass on because they just don’t fit those narrow models.

Also, when you focus on geographic areas, it keeps your marketing costs lower and your visibility in the area higher because you can market multiple ways in a smaller locale. I’ve written a lot about marketing – how, where and why!

And it’s important to be part of investment groups like your local REIAs and landlord associations to learn and to pass deals to others that you can’t or don’t want to handle. It’s difficult, time consuming, and expensive to find deals (no matter what strategy you use to find them), so you want to have others to pass deals on to that you ultimately don’t want.

Are you attending your local real estate investor meetings? You should be. This is where you will learn what’s happening in your specific area and what other investors there are focused on and why. You’ll also make the contacts you need – attorneys, contractors, buyers, etc. – for your investing business. Find your local meetings on MeetUp.com and NationalREIA.org.

Over time, our preferred strategy has changed depending upon our primary goals and desires, the changing economy and current legislation. We own rental properties, we wholesale, and we do rehab to retail.

What investment strategy have you chosen and why?

 

This post has 2 Comments | Would you like to leave a comment?

2 Comments

  1. Hi, Luke:

    Yes, I did plenty of cold calling and, as you’ve found, it is a lot of work. So much better when you have enough cash to spend on marketing to homes and the owners call you instead. But I know that takes time to build up to.

    Be sure to call FSBOs on Craigslist and sites like ForSaleByOwner.com. At least you know those people are wanting to sell. You can also call sites like ForRent.com and look for landlords wanting to sell.

    I have lots of ideas on this site about ways to find sellers. Use the search bar on the homepage to find them. Be sure to read https://www.karensperspective.com/100-ways-to-create-real-estate-leads/

    Good luck to you and thanks for writing!

  2. Thanks for the article. I am checking out your site after listening to your BP podcast for the second time. I really connected with the path that you took and I am currently in the initial marketing phase where I, for some strange reason, feel like a criminal too. At this point in time, I wouldn’t mind getting a “government phone call” like the one you got on your first deal.

    My investment strategy is to get my wholesale business such that I am getting approximately 30 deals a year. I plan on initially getting a decent amount of cash built up through wholesaling these deals and then slowly keeping a larger and larger percentage of the deals for my own long term rental portfolio. I want add to my “tool built” during this early phase so that I can get deals, via subject to or FSBO, that a typical wholesale wouldn’t work with.

    Part of the building up of cash is to get my wife out of her job as soon as possible so that she can help us meet our financial goals through real estate as well as giving her space to start her own passion projects.

    Your marketing strategy of focusing on location is interesting to me and seems ideal if your end game is to buy and hold. While this is only my second week marketing, I have been driving for dollars, which is obviously location specific, and gathering probate data at the courthouse (haven’t got the letters out yet, as I am still getting processes set up). I have been cold calling the DFD prospects and there is just something about cold calling that I find unappealing and non-kosher. But it seems like the market (Atlanta) is so saturated that its something you have to do. (But maybe I could start marketing, “I will never call you unless you give me your number first”). I am hoping to have the vast majority of my marketing be non-cold calling methods once I get more cash to work with. Did you ever or are you currently cold calling? (Side note, I refuse to cold call probate prospects)

    p.s. My end game is 250 doors with a minimum monthly profit of $100/door. Ideally this will happen in five years, which I know is super ambitious.

Leave a Comment

%d bloggers like this: