So, you guys know that I swear by the Single Family Triad. I’m maneuvering in all 3 parts of real estate investing many times throughout the year. What is the Single Family Triad?
Let me explain….I do one of three things with every deal I put under contract:
- I Wholesale it to another RE investor
- I close on it, rehab it, and sell it to a retail buyer
- I close on it, and rent it out for passive monthly income
I usually encourage beginners in this real estate investing biz to start of wholesaling because it has no risk and you can make tons of money while you’re still learning. It doesn’t take any cash or credit to close on any of your deals, it just takes the entrepreneurial hustle…I know you have that!
Once you start doing a few wholesale deal and have put some nice money in your pocket, you’ll want to step into rehabbing where the profits can be much larger. I mean they’re SERIOUS!
So, you actually can rehab and sell houses without any of your own money as well. You can use hard money lenders to put up all of the money for the purchase price and the rehab work. I will get into this in detail in a different article, but I just wanted to make sure you knew how to get into this next pillar of the Triad.
Now, as you start to get some of those rehab deals done, you’ll want to have some of the profits start to work for you.
You can then start to use the big profits you’ve been making to pay cash (or put a percentage down) for a single family home that you’ll keep for the long term to rent out.
You’ll be getting monthly income that’s totally passive (my favorite), and you’ll be getting a ton of tax benefits as well. Check out this rental property calculator.
I love single family rentals for many reasons. Some of them include:
- Tenants rarely move out
- Tenants pay all utilities
- Less tenant conflict than in multi-families
- They are very liquid (can be sold quickly) and can be sold to retail buyers easily (instead of sharky investors with multi-units)
There are plenty more reasons, but I wanted to highlight a few good ones.
Single Family Triad
The bottom line here is that once you’ve conquered a deal in each part of the Triad, you’ll really start to grow and move into each one as you please with your deals.
Maybe a certain deal needs so much work that you don’t feel like it’s worth it for you…Wholesale that one for a quick $10,000 profit.
Maybe there’s a deal you run into that has a monster spread of $75,000 for a rehabbing profit. Close on it, do the work on it, and sell it for that big payday a few months later.
Maybe you run into a deal that is in a great area that you know would attract a nice long term tenant. Buy it and keep it and let your mailbox fill up with $.
You get my point here.
It’s fun to always have deals going in all parts of the Triad and it conquers wealth creation from many angles… You get the long term income, growing net worth, huge immediate lump sums, etc…
So, I know you may not be at this point yet, but I wanted to highlight your future and excite you. Your dream lifestyle isn’t that far away…