What strategy to turn too?

Question

I just closed on my first investment property using traditional financing (whohoo!) so I have to wait a bit before going down that route again, so frankly, any strategy outside of that. Which I know is a hugeeee range and I am getting a little lost trying to focus it!

I was honing in on seller finance or a lease option but the market isn’t in my favor right now so my cold calls are like ice cold calls. I feel like they aren't worth my time, but are they?

I turned my attention to str loans and rental arbitrage but I’m not in a lucrative area (Sacramento) when it comes to that + my experience is limited there so I’m sort of struggling with which direction to turn...

I also am a bit torn on whether or not I should focus my attention on changing my W2 job to something with a higher income, or on making more money as a real estate agent (I joined a brokerage in November!). I haven't made a sale yet but I know that has potential with time.

So my question:

• Do I focus on cold calling seller finances + FSBO's from the MLS OR cold calling landlords asking if they would be interested in a lease option?
• Do I try to learn how to become an Airbnb host + gain STR experience and try to do it in my market? OR do I try to do it remotely in a more touristy/business travel market?
• Do I try to change my W2 job OR do I focus on building my agent sales?

Thank you!!

Mike Shemp · Answer

@Carmella Lombardi

Congratulations on closing your first property!

I can give some thoughts on #2 and #3 as we don't do long-term rentals....we do W2 jobs and are Airbnb Superhosts with 3 long distance rentals (7 hours away).

If you are doing long term rentals, you are in the landlord business and if you do short term rentals you are in the hospitality business....each area also has diffrent laws.  Also the amount of time required of you, and cashflow are different for both.  Som people say short-term rentals require more of your time, but you get better cashflow, and are a little riskier because towns can bring down STR regulations that will impact you.

The ways to help mitigate that is to use automation software which helps drastically reduce the time involved with an STR, setup a good team (cleaner, handyman, plumber, electrician, appliance, hvac person), and have an exit strategy if short-term regulation does come to that area.  We don't host people in our home, and only host people in our 3 remote STR properties...while we work W2 jobs during the day.  We use the W2 income to help fund purchasing the properties, and future properties.

Hope that helps.

Mike

Chad McMahan · Answer

Hi Carmella.

CONGRATS!!! That's is so exciting.

I *highly* recommend you work through your financing options with 2 specialists who should have this very well dialed in:

1) An investor savvy mortgage broker licensed to do business where you next want to purchase. Preferably one that actively purchases investments like you are purchasing.

2) An investment specialized local realtor

These 2 specialists will give you a list of practical solutions, and then you can create a road map and the 3 of you can work in lockstep, with the same goals to get you there. It's a great way to quickly build a team, where everyone is incentivized and has your best interests at heart and the ability to get there.

Keep it rolling!

Carmella Lombardi · Answer

Thank you both for the encouragement!!