Most profitable real estate niche
I'm looking for some insight to find the most profitable niche for a real estate business to invest into. I believe that if I am going to invest the time and work to learn real estate I should find the most profitable niche as I want the highest payout for my work as possible. I've researched some methods like BRRRR, buying other peoples syndication at a discount, wholesaling, etc..... Ideally what niche in your own experience is the most profitable compared to other real estate investing methods which can be scaled to millions of dollars of yearly revenue?
#1 All Forums Contributor
- Investor
- Virginia
@Mark Weins
Highest paying is the one you are best at. Also listened to a good podcast this am that notes it typically takes five years to be good at something
The most profitable method is usually a combination of personal knowledge, outside the box thinking, and risk tolerance.
It is easy to make a boatload of money if you are willing to take obscene levels of risk. But on the flip side it is also easy to lose your entire life savings by making those risky investment decisions. Just because something will earn you the most money, doesn't mean that it's the best method.
Before trying to scale to millions of dollars of yearly revenue, I suggest doing one deal and earning a few thousand dollars in yearly revenue first.
With that said there are only a handful of ways to rapidly scale a business to the enormous size you are wanting. And those are usually things like sub2, or becoming extremely good at raising capital from rich investors. Even things like BRRR take time to scale due to seasoning requirements for a refinance and often carry a fair amount of risk for novice investors who don't understand comps, ARV, rehab costs, and refinance costs.
#5 Multi-Family and Apartment Investing Contributor
- Investor
- Shelton, WA
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#5 Multi-Family and Apartment Investing Contributor
- Investor
- Shelton, WA
@Mark Weins every day investors make and loose money in any segment of REI you care to mention. Pick the one that lines up with your goals and master it. All the best!
@Mark Weins, as others noted, it really depends on where your skill set and preferred asset class is.
This is honestly like asking what kind of tech company is the best to start? Well, Mark Zuckerberg is doing pretty well, but for each Zuckerberg there are a lot that are doing okay, and many that never got off the ground.
In real estate, it is the same way. I know, either personally or of, people that are worth well north of $100mm, making $5+mm per year in retail, apartments, office, industrial, hotels, homebuilders, etc. The one area you don't see many ultra wealthy people sitting in is the buy and hold single family space. Many people start there to get into larger apartments, if they know and like residential.
Beyond that, there is no "most profitable" space. Profitability is almost entirely correlated to risk. "More profitable" often means more risk. If you catch the right market, you can make more money. But if you miss, you are more likely to lose everything.
