So, here is a quick overview of popular real estate investment niche strategies.
Wholesaling Real Estate
Wholesaling real estate is the strategy of buying an investment property at a deep discount and selling it for a profit to another real estate investor. It’s a simple concept to understand, but not so simple to implement.
Real estate wholesalers are paid for the service of finding profitable real estate investments for other investors who may not have the time or experience to find these properties.
Lease Option / Rent-To-Own
Lease option (also called rent-to-own) is the strategy where the owner leases the property to a tenant who has a contractual option to purchase the property for a specified price by a specified date. A portion of the monthly lease payment may be applied to the purchase price of the home in some circumstances
When buying a real estate investment “subject to existing financing ” the buyer assumes the deed to the property, but the loan remains in the original homeowner’s name. The buyer then takes over making the mortgage payments.
A HUD home is a foreclosed property. The owners of the property had a FHA mortgage, and the property was foreclosed. The U.S. Department of Housing and Urban Development (HUD) paid the defaulted loan off, and put the home on the market.
You can find HUD homes by searching HUDHomeStore.com.
Lien Sale / Tax Lien Sale
At a lien sale, an investor purchases the liens on a property. The investor then has the right to collect the liens, plus interest, from the homeowner. If the homeowner does not pay the liens, the investor may foreclose on the property.
Tax Deed Sale
A tax deed sale is the sale of property by a civil authority to recover delinquent taxes. The taxes owed by the homeowner are recovered by selling the property.
Probate investing consists of purchasing real estate in probate. Sellers of probate properties are typically very motivated, and investors can often purchase these properties at a deep discount.
A short sale occurs when the proceeds from a property sale falls “short” of the balance of all debts against the property. Lenders are often motivated to approve a short sale because it is an alternative to foreclosing on the property. Therefore, investors can often purchase these properties at a deep discount.
Real Estate Owned (REO) properties have been completely foreclosed, typically resulting in the lender owning the property after an unsuccessful sale at a foreclosure auction. These properties are often sold quickly and at a deep discount.
Flipping houses typically involves purchasing a fixer upper at a deep discount, rehabbing the property, and reselling it for a profit as quickly as possible.
Purchasing rental property also involves purchasing investment property at a deep discount and rehabbing it, but the investor then rents the property to tenants to create cash flow whereby he makes a monthly profit after all expenses are paid. The rental property creates wealth for the investor over time, and it is either sold far in the future or left to the investor’s heirs.
Commercial Real Estate
Generally speaking, commercial real estate consists of properties that serve a commercial purpose, such as office buildings, strip malls, restaurants, manufacturing and distribution spaces, etc. Investment properties require a great deal of capital and management; therefore, smaller investors may invest in a REIT or similar vehicle, rather than purchase the property.
Graystone Investment Group
Graystone is an experienced Investment Group, wholesaling properties in the Greater Tampa Bay market.
Unlike other wholesaling groups, we find properties that we resell to investors at discount prices, while also connecting them with private financing. We also coordinate with rehab and management companies we’ve worked with for years, at no extra charge.