INVESTMENT STRATEGY
NAVIGATING OPPORTUNITY
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Become a Strategy Savvy Investor UNDERSTANDING FOUR BASIC STRATEGIES WILL HELP YOU TACKLE ANY SITUATION YOU ENCOUNTER.
by Suni Goff
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, etc.).” Some of us may even have momentarily considered doing it ourselves. That’s the voice of our inner real estate investor talking. Most people continue down the road, but a few special people will listen to that voice and attempt to act. 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 their goals. 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. But, that’s the route most would-be investors take when learning how to navigate the world of real estate. Because every situation is different, a savvy investor needs to
be familiar with and confident about 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 you come across.
or let it go back to the bank through foreclosure. Although 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 across the country face similar situations every day, but who helps people like Mary Smith? A savvy real estate investor knows all strategies and understands how to make them work out for a win- win-win situation when the average investor would just walk away. As Mary researches her options, a website ad catches her eye. Laura Phillips, a local investor, claims to be able to help people in Mary’s situation. The content on the site is professional and relevant to what Mary 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 accepts Laura’s lease option offer of $195,000 with zero down and $1,400 a month for a one-year term. Laura agrees to be responsible for maintenance and repair costs during the option period. Mary is able to move on without the worry of covering her mortgage payments or being a landlord.
THE STRATEGY SAVVY APPROACH IN ACTION
Here’s an example of the Strategy Savvy approach that I’m referring to. Mary Smith bought her home two years ago for $215,000. The company Mary works for closed its doors last month, so she’s out of a job, with no prospects in sight. With her savings depleted, she can no longer afford the payments on her home and needs to sell quickly or face foreclosure. She now owes $195,000, but with the recent plant closings and general economic downturn, Mary’s home is only worth $200,000 now. The average real estate investor won’t help her sell it because of the narrow profit margin. Mary has two obvious options: She can either rent out the home
14 | think realty magazine :: september - october 2022
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