Short and Long Term Real Estate Investment Strategies | Think realty



Choosing your path to success, sooner or later

When it comes to real estate investment, there are two main strategies that investors can use to gain experience and achieve wealth. Two different paths to success involve a short-term strategy and a long-term perspective. A short-term strategy called “Buy and Rehab,” also known as “fix and flip,” is great for making quick money and quickly moving to your next property. An alternative is the long-term lease option, which often includes a 30-year loan program and generates passive income.

To be clear, there is no right or wrong answer when it comes to choosing between these two strategies. Both have proven to be effective in real estate investment. Here, I’ll go over the benefits of both and let you decide which is right for you.

Short term strategy – fix and flip

To maximize your capital as quickly as possible and be able to start buying other properties as soon as you want, the “fix and flip” strategy is a surefire way to do just that. Aside from the financial benefits, there are other skills that you can gain through this strategy, such as time management, home improvement, and relationship building, which are useful skills in this industry.

When it comes to financial gain, the perfect option is to fix and flip. Within 8-12 months, you can easily get a five-figure salary, maybe six figures, depending on the value of the property and the amount of work you are willing to do. These settlement days are a very attractive part of the industry, and many people get into business for this very reason.

Time management is a skill that manifests itself in every aspect of your life, but honing it on an ongoing project over a 12 month loan is the key to success. You can easily find out how long certain projects will take, which projects are worth your time, and which projects are best for increasing the return on your investment. Most standing loans can be arranged up to 12 months. If you can set a plan and rhythm for all the necessary fixes you need to make to the property, you can move on to the next step as soon as you want.

At RCN Capital, we do not have prepayment penalties on our fixed-price loan product, which encourages bug fixers to complete projects faster and make more money.

Whether you are looking to rehabilitate yourself or hire a trusted contractor, there is so much you can learn about the home improvement process. Everything from painting walls to replacing floors or remodeling a kitchen can be learned by repeat or from a contractor you can rely on.

The final piece of this puzzle that makes this process of fixing and changing so engaging is the ability to build relationships that set you up for future success. I have already mentioned contractors, but lenders play an important role in this too. RCN Capital is committed to outstanding customer service and values ​​repeat business. You can familiarize yourself with the rates and leverage of the lender, and knowing what to expect every time you pick up the phone to speak to the lender is a big plus. RCN Capital offers very competitive rates and leverage in the industry when it comes to fixed loans. Rates start at 7.74% and in most cases we can offer up to 90% LTV and 100% rehabilitation costs.

Long term strategy: buy and hold

The alternative is the exact opposite of the fix and flip model, but can still be just as effective. Long term leases (30 years) are an effective way to generate passive or secondary income that can take much less upfront effort than your typical “fix and flip” project. At RCN Capital, we require these long term loan properties to be ready to be rented out. This means that no funds can be allocated for rehabilitation, but at the same time it allows the investor to immediately start making money as soon as he has a tenant.

There is also an opportunity to learn useful skills through this strategy. Property management, market research, tenant selection and building professional relationships are all skills that are acquired in this field of activity.

Managing your property or becoming a landlord is an important skill that you will learn if you choose a long-term rental strategy. This starts with choosing the tenant that will be right for your property. You will need to assess how practical you need to be depending on the property and tenant. It’s a delicate balance, but mastering property management skills can go a long way towards generating a second source of income. Once you learn how to manage one property, you can move on to two or three. Once you learn how to manage a single-family property, you can move on to duplex, triplex or apartment buildings. This strategy and skills will allow you to multiply your income, and this is where you can start making a living for generations through long term rentals.

Market research is another useful learning tool to help you make more money from your investments. Choosing the right market, then finding the right property and setting rents at a tempting price while still maintaining a profit can seem overwhelming at first, but with proper research and the right direction, you can figure out the right numbers to make the highest possible profit. Doing this with multiple properties also makes the concept less complicated and you should be able to do it with ease before you know it.

As always, building professional relationships is key when it comes to long-term investment property leases. Of course, a positive relationship with your tenant (s) is a plus, but building that relationship with the lender is also a plus. RCN Capital will answer any questions regarding this strategy, and we will always work to ensure that rates are the most attractive to investors. RNC Capital currently offers rates from 3.85 percent and can raise LTV up to 80 percent on these long-term loans.

In any case, you are implementing your real estate investment strategy, there is a path to success. Just make sure you choose the right strategy for the right property and, more importantly, the right strategy for you. What do you want to get from real estate investing? Which strategy works best for your personality? Once you answer these questions, you can start investing and start making money.

Nate Zelinski, Junior Business Development Coordinator, joined RCN Capital in 2020. He adds his ambition, communication skills, teamwork and public speaking ability to the RCN Business Development team. Nate’s goal will be to forge new, long-term business relationships with brokers and borrowers, and maintain the strong relationships that RCN Capital has already established. Nate’s previous work experience includes sales, advertising, copywriting, and social media. Nate graduated from the University of Connecticut in 2015 with a degree in Journalism.


Source link