Real Estate Investing: Acting Strategically

The vast majority of investors misses the boat and never takes any action at all. They are stuck in “webinaritis” afraid to implement any of the great strategies and tactics that they learn. Well, the first step toward success as a real estate investor is simply to take action.

The next hurdle is to take action strategically. Strategic action means taking a look at the marketplace and knowing which strategy is work best in that given market and then implementing that strategy in a way that will stand out favorably from all the other players in that market. When you both think and act strategically, this is when you begin to make money consistently, not just hit-and-miss.

1. The first step of strategic investing is to understand your marketplace.

Real estate markets are local and respond differently to various strategies. Even when the market cycle is generally up or generally way down on a national basis, the market may be entirely different in a given local area.

A college community may have a perennially strong student housing market that may be immune to the market cycles. In this type of community the primary way to make money as a real estate investor may be in buying and holding student housing rental properties. In a community that was highly affected by the housing bubble-many cities in California, Florida, Arizona and Nevada for example-the primary market strategy is in transactional flipping of short sale and REO property. These markets will also support a growing number of rental properties to buy and hold as people displaced from owning become renters.

2. The second step of strategic investing is to either adjust the market or the strategy to assure a steady supply of business.

The investor who does not have the money to invest in a community that is largely a buy and hold rental area (like the college community) may need to either find a private money partner to invest with or to invest in a different market where short sales and transactional flipping of property is more prevalent. Transactional investing in wholesale properties requires little or no up front capital, but it may require extending out one’s investment territory in order to find enough business to make this strategy successful as a full time business.

3. The next step is to refine the process so the investor can dominate the marketplace.

Strategic actions to refine the business may include becoming the perceived local authority in real estate investing in the area so people bring their referrals and opportunities to you first. Dominating in online and direct marketing is another way to set your business apart from the competition so that clients come to you first when they want or need to sell. Automate and delegate so that you can get more done and have a wider or broader reach than your competition. Alternatively, find yourself an unmet need and cultivate a niche within your market.

By thinking and acting strategically, the investor can assure greater business success