Become a ‘Strategy SAVVY’ Investor

We’ve all done it.

At some point, we’ve driven by the house with the abandoned vibe and thought, ‘Man, somebody should buy that and turn it into a__ (insert restaurant, boutique, salon, office, remodel, here)__.”

Some of us have even wished we could, or momentarily considered doing it ourselves. That’s the voice of our inner real estate investor talking.

Most people continue down the road and go about their daily lives, but a few special people will choose to listen to that voice and attempt to take action.

How do we make this dream a reality? Most real estate investors either empty out their savings or apply for a loan at the local bank. But what happens when you don’t have adequate savings or credit for bank loans? Do you walk away from what could potentially be a very good real estate deal, leaving it for someone else to come along and profit from? The Strategy Savvy Investor won’t let less than ideal circumstances stand in the way of achieving his goals. We’ve heard cliché’s like ‘where there’s a will, there’s a way’ all our lives, but what does it mean to actually live by this code? How far would we be able to go if we did?

There’s a lot to be said for unwavering determination; diligently working one or two investing strategies will definitely pay your bills, but it won’t make you rich. Unfortunately, this is the route most would-be investors take when seeking to learn how to navigate the world of real estate. Because every situation is different, a savvy investor needs to be familiar and confident in these basic strategies:

1. Wholesaling
2. Lease Options
3. Retailing
4. Owner Financing

If you have a clear understanding about how they work, you will be able to tackle any situation that you come across.

Let’s take a look at a simple, straightforward example of the Strategy Savvy approach that I’m referring to.

Mary Smith bought her home two years ago for $215k.

The company that Mary works for closed its doors last month and she finds herself out of a job, with no prospects in sight. With her savings depleted, she is no longer able to afford the payments on her home, and needs to sell quickly or face foreclosure. She now owes $195k, but with the recent plant closings and general economic downturn, Mary finds that her home is only worth $200k. This leaves her unable to employ the assistance of a real estate agent to sell it, and the average real estate investor won’t touch it because of the narrow profit margin.

Mary has two obvious options; she can either rent it out or let it go back to the bank through foreclosure.

While Mary doesn’t have the desire, money, or knowledge to deal with being a landlord, she doesn’t want to ruin the good credit score she has worked hard to build.

Many people find themselves in similar situations all across the country EVERY DAY, but who helps people like Mary Smith?

A savvy real estate investor knows all strategies and how to make them work out for a win-win-win situation when the average investor would just walk away.

Mary is researching her options online and comes across a website that catches her eye. Laura Phillips is a local investor who claims to be able to help people in Mary’s situation. The content on the site is professional and relevant to what she is dealing with, so she decides to give Laura a call.

After meeting with Mary and evaluating the home, Laura presents her with two separate offers. Mary chooses to accept Laura’s Lease Option offer of $195k with zero down and $1400/month for a 1-year term. Laura agrees to be responsible for maintenance costs and repairs during the option period. Mary is able to move on without the worry of covering her mortgage payments or being a landlord.

Since Laura doesn’t plan to occupy the home, where does she have room to profit in this deal?

Laura has a pool of potential buyers and sends the house info out to a few she thinks might be interested.

Jack and Lois Lehman fall in love with the home and settle on terms with Laura of a $200k purchase price with $5k down and $1600/month for a term of 1 year. They agree to be responsible for maintenance costs and repairs, and there is no early cash-out penalty.

The situation is ideal, as Jack just got a job transfer from their hometown 2 hours away. Lois and the children can move to the new house with Jack immediately while they wait for their old house to sell and don’t have to worry about short-term renting or long commutes for Jack. Once the sale of their old home is complete, they are able to qualify for a bank loan on the new house and close well before the 1-year term is over.

WIN-WIN-WIN.

Mary received a fair price for her home and doesn’t have to deal with landlord headaches or foreclosure.

Laura receives $5k on a down payment and $200/month in positive cash flow.

The Lehman family moves into their new home on terms that give them time to get things in order for a bank loan and cash Mary out.

The overall concept shown in this example can be applied to almost any property situation, with the right knowledge.

With the crazy real estate climate and barrage of reality ‘Fix and Flip’ real estate investing shows, more and more budding entrepreneurs are looking at investing in real estate as a viable way to expand financial portfolios and satisfy their dream of becoming the boss.

For those considering taking advantage of the wealth of opportunities to be found in every town across the country, there is no shortage of education available to help get started on the road to real estate investing. Almost every method of delivery is available —from books and digital media to live seminars and one-on-one coaching. The large majority of these tend to focus on teaching one or two strategies, however, and leave large gaps in a prospective real estate investor’s training.

Outdated information can lead to legal difficulties and cost thousands of dollars in ‘learning curve’ losses, while not knowing all of the available strategies and how to properly execute them will let deal after deal slip through the gaps, relegating what could be a rewarding career to a hobby.

Fortunately, savvy investors have a valuable resource available, right at their fingertips.

REIPro Investing software is the premier one-stop-shop for all aspects of real estate investing; with a vast education library and tools to help determine the perfect strategy for virtually every property situation, it’s designed to guide and streamline the process for all real estate investing experience levels.

Knowing how to properly execute all strategies and how to decide which is right for each situation ultimately determines the level of success an investor will achieve. By taking the time to become Strategy Savvy, the future of real estate investing looks bright, indeed.