Top 3 Real Estate Investment Strategies – The Good, Bad and the Profitable

Slideshow slides
Basic Options
Active
 Buy & Hold
 Buy & Flip
 Lease to Own
 Vendor Take Back
 Construction/Dev
 Rezoning
 Unique Property

Passive
 MIC’s
 REIT’s
 RE Investor
 Private Lender

This presentation will be on Buy & Hold, Buy & Flip, Lease to Own

Buy and hold
 Buy a Property for the Purpose of Renting it to a Tenant
 Collect a monthly rent cheque
 Responsible for the home’s condition — depends on rental agreement
 Must qualify for both mortgage payments

Benefits
 Potential for Positive Cashflow
 Equity Investment Savings
 Can Use a Mngmt Company for Low time & Energy Output
 Exit Strategy — New Renter, Lease Property, Sell

Downfalls
 Potential for Negative Cashflow
 Decrease in Property Value
 Renters Damaging Property
 Property Maintenance
 Qualifying Upon Renewal

Buy and Flip
 Buy a Home Below or at Market Value, Renovate/Improve & Re-Sell in 1-3 months
 Dependent on Contractors/Materials
 Strong Market Understanding
 Good Timing is Needed
 Must Qualify for Both Mortgage Payments

Benefits
 Potential for Quick Capital Gains
 Transactions Can Be More Frequent
 Exit Strategy — Sell

Downfalls
 Expensive Cost of Entry
 High Risk of Investment
 Dependent on Contractors/Materials
 Wont work in a Declining Market
 High Output of Energy & Time
 Difficult to Qualify for Mortgage
 Conventional Lenders Don’t Like You

Lease to Own
 Buy a Home & Lease to a Tenant
 Pre Approve Tenant Ideal
 Option Agreement, Pre Agreed Upon Price
 Exit Strategy — Sell, Rent, New Tenant Buyer

Benefits
 Receive Instant & Ongoing Cashflow
 Have a “Guaranteed”, Pre Qualified Buyer
 Low Maintenance
 No Turnover or Vacant Suites
 If Tenant Buyer Leaves, Property, Down Payment & Credits are Yours

Downfalls
 Tenant Buyer Leaves & Property Value Falls
 Tenant Buyer Doesn’t Qualify to Buy at End of Option Term
 Badly Drafted Option Agreement
 Difficulty Finding Tenant Buyer
 Must Qualify for Both Homes to Qualify for Mortgage