How to Make Money in Real Estate
When I ask people if making money in real estate is hard, they usually answer a resounding YES.
Most people think that real estate is difficult, complicated, and ultimately hard. And hard usually in their mind equates to RISK. And you know what, let me just take a moment and validate it.
There are so many ways of doing real estate that are hard, that are risky, that create THAT concept. But it’s all going to come down to what YOUR STRATEGY is. Because I’m about to share with you a strategy that for me, makes real estate EXTREMELY easy.
If there is one thing I’m most thankful to my mentors for, it’s that they helped me really figure out what would really identify as THE BEST STRATEGY in all of real estate. They couldn’t answer which one is the ultimate best. However, they made me realize that I CAN CREATE A CUSTOM FORMULA for myself.
In the beginning, I was elated and enthusiastic to explain that formula to my friends and acquaintances, but after some time, I actually got tired of explaining it to people so I wrote a book about it, Strait Path to Real Estate Wealth.
Let me give you a crash course though. For me, the best real estate investing strategy would have these six core elements:
A strategy that will take the LEAST TIME.
Who wants to use a real estate strategy that takes maximum time?? I hate fix and flip.
Why? Because there’s so much time that can be involved with that kind of system. Cosmetic improvements alone can take up to 30 days just to increase the property value. And the longer you take to finish the flip, the more dollars go down the drain. So I’m interested in the kind of real estate strategy that would have the LEAST TIME component.
A strategy that will take the LEAST EFFORT.
In life, there are hard ways and easy ways and real estate is the exact same thing. There are SO MANY hard ways of making money, and usually the harder it is, the more risk there is, so… I like easy. I like to gravitate towards something that requires the LEAST AMOUNT OF EFFORT.
A great example of this is rental properties.
A strategy that poses the LEAST RISK.
I encourage you to look for a strategy with the LEAST AMOUNT OF RISK when you’re looking at real estate deals; because something with the least amount of risk is what’s going to be the most sustainable.
A strategy with the HIGHEST DEGREE OF PROFITABILITY.
Unfortunately, most people think that this is the only element that matters.
PROFIT is an important gauge, but if it involves high risks, I will gladly walk away, as I’m not willing to take on all that extra risks. Remember, real estate should never be a big of a gamble.
A strategy that WORKS IN UP AND DOWN MARKETS.
A lot of strategies are market-dependent. You have to study your market carefully because you’ll see lots of opportunities in every marketplace, along with as many risks. Hence, having a strategy that works for either both in and up markets will give you at least a 50% chance at success.
A strategy that has a SERVICE component.
When doing real estate, you should ask yourself: ‘What is the service that I’m actually providing for mankind?’. I actually asked myself that at one point just to keep myself in check.
And so I found a really core key strategy that takes all those six core elements and in my equation, has shown me the ABSOLUTE BEST APPROACH TO REAL ESTATE.
So let’s answer this question:
‘How DO YOU make money in real estate and WHAT IS THE BEST STRATEGY with these six core key elements?’.
For me, it is A SHORT-TERM, BUY AND HOLD RENTAL strategy on SINGLE-FAMILY HOMES PURCHASED BELOW THE MEDIAN in the best markets.
What exactly is ‘short-term’?
Short-term for me is a 2, 3, 4, or 5-year holding strategy. I’m not trying to hold a home for 30 years. Why? Because if I buy a home, I’m gonna start accumulating some repairs, refurb repairs after 5, 6, or 7 years; so I like to hold it short-term.
Why a short-term buy and hold on single-family?
Because I’m passionate about “The American Dream” real estate.
That’s why it’s bought below the median. 3-bedroom, 2 baths; 4 bedrooms, 2 baths – That’s the largest percentage of what Americans are trying to get.
Why below the median?
Buying below the median is also key for up and down markets because if you buy below the median, you’re really insulated and protected when the market falls apart. Similarly, that’s why I then go in and purchase in the very best markets.
Those 6-core criteria I just gave you AND my formula for how to make the most money in real estate – really comes down to the algorithm and this Math.
When we talked about least time, least effort, least risk, most profitability, providing a service and working in up and down markets, that also comes down to quality of life. For me, quality of life says ‘My real estate can build and grow and run passively, especially inside of a system with a team.’.
That’s really gonna be a a game-changer, making sure that I can enjoy my life. True to this day, I spend less than five minutes a month managing hundreds of homes because of these 6-core criteria, this specific strategy, and the team and system that I have in place to manage it.
There’s a lot of different ways in making money in real estate. But with THIS specific strategy of SHORT-TERM, SINGLE-FAMILY HOMES that are bought BELOW THE MEDIAN with equity, with discounts, with certain cash flows, in my opinon, THAT’S the strategy for making the most money with THE LEAST TIME, EFFORT, and RISK.