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8 Creative Real Estate Investing Strategies
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11/22/2023

8 Creative Real Estate Investing Strategies

Olympia may seem like a small city to outsiders, but we believe that it is one of the most desirable places to live in the Pacific Northwest, and so do the area's buyers. As of last year, Olympia ranked fourth amongst small markets with homes selling above asking price.

What does this mean for real estate investors? It means that getting into the market can present challenges, but turning a profit is almost a guarantee.

Today, we're going to talk about creative real estate investing strategies. Whether you're starting or growing a real estate portfolio, at least one of these strategies should work for you.

Read on for eight creative approaches to investing in real estate in Olympia and surrounding areas.

1. Fix and Flip

The fix-and-flip approach to real estate investing is a popular one in large part thanks to television networks like HGTV. However, it's not as accessible as it may appear at first glance. To make the most out of the fix-and-flip approach, you're going to need to know your market well, have a reliable cash flow, and build an accurate renovation budget.

The fix-and-flip strategy can work at all levels of real estate, including the high-end or luxury side of the market. In this case, you're going to want to seek out historic homes that have fallen into disarray with the goal of restoring and modernizing.

2. Wholesaling

Wholesaling is one possible inroad into a thriving real estate portfolio. The goal is to buy properties in up-and-coming neighborhoods to then sell them at a small mark-up. While some wholesalers will make small cosmetic improvements, many won't make changes to the property at all before putting it back on the market.

With each small profit, you increase your buying power to eventually make your way into the luxury market. Keep in mind that with such high interest rates, wholesaling may not occur as quickly as you'd like. To make the most of wholesaling in this financial climate, you'll need serious marketing savvy.

3. Move In Then Rent

What if you're looking for a place to live and a way to build your real estate portfolio? If the former is more pressing than the latter, consider the move-in-then-rent approach to real estate investing. As the name suggests, this strategy involves buying your primary residence with the intention of eventually moving out and turning it into a rental property.

This strategy is ideal for buyers and investors who can't currently afford as much house as they'd like for themselves. Buying a house in your current price range that will yield rental income in a few years can increase your buying power over time, making those luxury properties you dream of owning more accessible.

4. Live-In Flip

The live-in-flip strategy is not unlike the move-in-then-rent strategy except that you're also renovating the house while living in it. This is one of the less popular strategies but works well for investors who like to take a very hands-on approach to their property flips.

Another appeal of this method is that as long as you follow IRS rules, up to $250,000 of the profits for an individual or $500,000 for a couple filing jointly won't be taxed.

5. Short-Term Buy and Hold

A short-term buy-and-hold strategy is ideal for investors who are willing to rent out properties before selling them. The purpose is to wait for the home to appreciate while making strategic improvements using market-appropriate rent increases over time.

Many investors use this strategy for multi-unit properties like apartment buildings or townhouses. You can also use it for high-value properties in desirable neighborhoods. Ultimately, the goal is to purchase a property that will yield a large rental income and appreciate significantly in value over the next one to four years.

6. Long-Term Buy and Hold

For some real estate investors, the goal is to set up financial security later in life. For example, if you're hoping to pad your retirement funds, the long-term buy-and-hold method is a good and reliable choice. If you're looking for faster liquidity, it probably isn't the right strategy for you.

Once again, this strategy is usually used on rental properties. Owners turn a rental profit over the course of five or more years, make strategic improvements, and often amortize loans before selling the property at a significantly appreciated price.

7. Real Estate Investing Trusts

What if you don't have the funds or credit score to invest in real estate alone? What if you want to benefit from diversifying your portfolio with real estate but don't want the hands-on experience of property ownership? If either of these sound familiar, you may want to consider real estate investing trusts (REITs).

A REIT is similar to a mutual fund except that you own a portion of one or more properties, rather than stocks and bonds. This is one of the most passive forms of real estate investing in that all you need to do is research REITs to find the best fit for you, decide on your investment level, and wait for your investment to yield profits.

8. Hard Money Lending

Many people who are interested in real estate investing overlook options like hard money lending. This is a sort of secondary investing option in that you are providing cash to real estate investors, not investing in real estate directly.

Hard money lending is only a good choice if you can afford to take on a high level of risk. Hard money loans tend to come with strict parameters and high interest rates and can yield a high profit when done well. However, you do run the risk of providing a bad loan to an investor who won't end up paying it off.

Work With Us for Creative Real Estate Investing

Investing in real estate is one of the safest and most profitable ways to diversify your portfolio. If you're looking to apply these creative real estate investing strategies to the luxury real estate market in Olympia, Olympic SIR can help.

We help both buyers and sellers navigate the Olympia real estate market and assess the different types of real estate that best suit their needs. Learn more about our agents and let us know how we can be of service.

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