….this was actually put out by the Cleveland Fed on March 1, 2010. I wouldn’t believe it unless I saw it. [via ZeroHedge]

Whether you are just starting to dip your toes into the ocean that is real estate, or are free diving in the great blue yonder, you need to be aware of the rules that govern your ability to maximize your success.  You have most likely heard that there are countless ways to become profitable within [...]

This Article is Copyright © 2004-2010 BiggerPockets, Inc. All Rights Reserved.

Real Estate Investing: Specialize or Die

Whether you are just starting to dip your toes into the ocean that is real estate, or are free diving in the great blue yonder, you need to be aware of the rules that govern your ability to maximize your success.  You have most likely heard that there are countless ways to become profitable within the huge genre that is real estate; if so, then You’re right!

Some people like myself stumble into a niche they love, and are great at from the start of their career, while others may fail in real estate before ever truly finding what inspires them to kick butt and take no prisoners.

Here are some tips to help you narrow down the search to find what is right for you.

1. Keep the end in mind: Sit down and make a list.  A list of your short and long term “financial” goals, your skills, your abilities and your limitations.  Do you desire steady residual cash-flow?  Do you need to make cash right now?  Do you have starting capital?  Are you handy with a hammer?  Are you a good leader? Manager? Negotiator?  Like I described in my last post, “What will you do for success in Real Estate”, know what you are willing to do and not do to reach your goals.
2. Explore your options: Mobile homes, wholesale, retail, lease options, REOs, fast turning, rehabbing, commercial investing, short sales, loan modifications, Realtor, buy and hold, multifamily, foreclosure, land development, pre-foreclosure, note buying/selling, etc.  Spend a short time going through this list, learning about each and deciding if the vehicle in question will get you to your real estate goals AND make you happy in the process.
3. Have lunch with an expert: One of the best recommendations I can make is for anyone in real estate that is currently unhappy or not as productive as they would like to be, to take a “mentor” out to lunch.  In my first week investing, I took five knowledgeable investors who were not trying to sell me some course, out for lunch to pick their brains.  These meetings gave me insight to the game, that has carried me through to this day.
4. Don’t spread yourself too thin: I know that I am not the only one that has ever piled too much on to his/her plate.  Over committing to too many deals at one time (on more than one occasion) has almost cost me my entire bank roll.  Unless you have completed more than 15-20 transactions, it will be wise to complete one deal, get it cash-flowing, then move onto the next.

   Choose just a few areas of real estate that interest you, and run with them.  Market for your targeted properties and keep to your game plan. Do not stop marketing after you are committed to a propertyl;  if and when you find a great deal, but are too busy to act on it simply wholesale the deal for fast cash.  It is far better to make a smaller wholesaling fee and continue investing profitably, than to bite off more than you can chew and go far over budget.

5. Become an expert: Becoming an expert is really a never ending process, but when you find a niche or specialty in real estate, dominate it!  Become the best investor in your town within your desired field.  Be the expert that people are asking for advice and the name that everyone thinks of when they think of your niche.

Always remember that your end goals and desires may continuously change.  Be open to new ideas, what may sound like a terrible investment strategy may just turn out to be a great money maker.  Keep in mind you are your own person, what works for someone else may not be your cup of tea.  Find what you want (money goals), what suites you (i.e. mobile homes) and kill it!

- J. Fed

This Article is Copyright © 2004-2010 BiggerPockets, Inc. All Rights Reserved.

Real Estate Investing: Specialize or Die

The housing boom resulted in the creation of thousands of new for-sale homes and condominium projects. The subsequent crash left many of these properties unsold or partially completed. In many cases, homebuilders and multifamily developers involved in these projects have either cut their losses and walked, lost the assets through foreclosure or are trying to secure [...]

The housing boom resulted in the creation of thousands of new for-sale homes and condominium projects. The subsequent crash left many of these properties unsold or partially completed.

In many cases, homebuilders and multifamily developers involved in these projects have either cut their losses and walked, lost the assets through foreclosure or are trying to secure additional financing to keep their heads above water. Add to that all the lenders with vacant houses and buildings thrown onto their laps.

All the while, there are numerous homes and apartment projects sitting empty or abandoned across the country. Sure, investor appetite is high for most assets out there, particularly multifamily. But even if these projects get snapped up, the demand has yet to materialize.

But what if there were something that could be done to both fill those units and address a major social issue at the same time?

That’s along the lines of what Habitat for Humanity is doing in Florida’s Sarasota County, according to a report in a local paper. The organization, which usually builds homes for families in need of one, has decided to shift gears for the next few years and instead rehabilitate homes that have been foreclosed on or abandoned. According to the report, Habitat can, in some cases, buy and remodel the residences cheaper than it would cost to build them. The effort would also help to ease the blight on neighborhoods by minimizing the number of homes sitting empty. Sarasota County and the City of Sarasota are partnering with the nonprofit through a $17-million infusion of federal stimulus money, which will help acquire and revamp about 100 abandoned and foreclosed homes by Feb. 11, 2013.

Similarly, advocate groups in New York City have been campaigning to have vacant condo and apartment units in some neighborhoods turned into affordable housing. The areas in question are primarily gentrified communities across the city, where developers—swayed by demographic trends—kicked off dozens of high-end projects on spec. Now that demand has decelerated dramatically, many of those luxury condos and rental apartments remain unoccupied. Why not take those vacant units to provide housing for those in need, the groups maintain?

I must admit, I’ve had the same thoughts myself, when I happen to venture into those neighborhoods. Take Long Island City, for instance, which houses one of my favorite restaurants, Waterfront Crab House (if you like seafood and find yourself in that area, you must check it out). When my husband first took me there nearly 10 years ago, the area was comprised of mostly industrial warehouses and shut-down factories.

A couple of years ago, there seemed to be more people living there and more coffee houses, funky lounges and restaurants opened up, and much of Long Island City was rife with development—mainly, of luxury condo projects. Go there, today, however, and it’s clear that the developers overshot their target. There are no fewer than a dozen high-rise condo towers out there, some unfinished and some only partially occupied—or both.

In a city is already suffering from a dearth of housing for low-income households, those vacant units could serve a much better purpose than they are now. Now, given what it cost to develop these projects and the financial weeds the developers and lenders may be in, I don’t know if this is even feasible. But it’s a thought…