Real Estate Investment Niches

Hi, this is Frank Chen with REIClub.com, the only site you need as a real estate investor. Today I've got a quick video on some popular real estate investment strategies.

I get asked all the time…

• What's the most popular real estate investments?
• Where can I make the most money?
• What's best if i'm a beginner?
• If I don't have money or credit, can I still invest in real estate?

So here are some niches to get you started… the do vary by difficulty and profit

Wholesaling / Flipping Real Estate

Wholesaling real estate is a strategy in which an investor places a property under contract, finds a buyer who is willing to pay more for that property than the investor agreed, and then flips that property or assigns the contract to the end buyer.

Lease Options

In a lease-option, a property owner leases the property to a tenant who also has the option to purchase at a specified price any time during a specified time period. As a buyer this strategy allows you to control property without getting a loan. As a seller this allows you to profit from a larger pool of potential tenant/buyers.

Subject To's

Taking over a property “subject to” an existing loan. This means you get the deed to the property but you do not assume the loan. The loan stays in the original homeowners name, but you now control the property and make the mortgage payments on it.

Hud Homes

A HUD Property is a property taken over by the Department of Housing and Urban Development (HUD) after default on an FHA loan. These homes are usually sold through an electronic auction to the highest bidder. You can find these properties on the HUD.gov site, or through the MLS.

Tax Lien / Tax Lien Sales

Tax lien – A tax lien, is essentially an IOU imposed by Federal or state law to secure payment of taxes that have NOT been paid. As an investor, you can purchase these liens and make money from the interest, or become the new homeowner if you are not paid back.

Tax sale – Property is auctioned off by the city to investors in order to pay off any remaining debt on the property. This is usually done at a discount.

Probate Investing

If someone who owns real estate dies without having a will or trust that dictates what happens to the property, the heirs may be willing to sell the real estate to an investor.

Short Sale

A short sale is when the loan amount owed on a property exceeds the actual worth of the property and the lender is willing to sell the property at a discount to reduce their losses.

REO

When banks foreclose on homeowners who have not paid their mortgage, the bank ends up owning properties (called “real estate owned”) they wish to sell.

Rehabbing – Fix and Flip or Rental

Rehabbing is when an investor buys a distressed property, fixes the property up and either sells it at market value for a profit or rents it out.

Rental – Buy and Hold

Purchasing real estate to keep as a rental property. You can make money off the monthly cash flow, tax benefits, and appreciation of the property when you sell it. Great way to build equity.

Commercial

This includes apartments, self storage, mobile home parks, retail centers, office buildings. As an investor you make money from the monthly cash flow, and appreciation. It's a lot like residential, just on a much larger scale, and requires a bit more experience and savvy. Not a good choice for newer investors.

Real estate investing is very versatile, there isn't just ONE way to do it right. The more educated you are, the greater likelihood you will make it big in real estate.

What I have listed is a brief definition of some of the many options you have as a real estate investor. I barely scratched the surface on some of the more popular real estate investment strategies. Please check out our YouTube channel, where we do have individual videos explaining many of these niches. We encourage you to check it out, and learn as much as you can. If you have any questions feel free to let us know.

Again, this is Frank Chen with REIClub.com. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you'll be automatically notified when we upload more quick video tips for you. Take care and good investing.