Choosing a Real estate investing niche when getting starting is a great way to increase your success
I love Real Estate Investing as a great alternative to stocks and bonds.
There are a number of alternatives/niches and strategies that you can implement. It can be overwhelming at first, but with the right education and focus you can succeed.
My suggestion when you are starting is to choose a real estate investing niche for 6 to 12 months, learn it and become great at it, before moving on to a new one.
One of the problems that I have seen with new investors or people just getting started is they are jumping from one niche to the other on a regular basis and a year goes by and they still looking for the best venue, and they have not close a deal yet.
Focus is the key.
When I started I had the same problem, looking into what was my niche, but when I made the decision to just focus on one (single families), I put my energy 100% into learning and what strategies I was going to do to be the best at it.
What I love about real estate is that is an asset that I can touch and see. With some simple calculation I can determine if it is a good investment or not vs stocks where there are multiple variables and I cannot have control over the asset
Here are the different real estate investing niches I suggest to get started
Raw land
This is basically owning the land. The land can be improved with utilities and then sell it at a higher price or it can be subdivided and sold separately. I know investors that sell the land owner financing so they get a down payment for the property and they receive a steady cash flow. In some cases is even better that owning a rental house, you don’t have to worry about fixing a anything
Mobile Homes
Here you can start investing with little to no money out of your pocket and can be a great source of cash flow. Although, mobile home is a vehicle, you can buy the mobile home with the land, or you can buy just the unit at a mobile home park. You can sell it or rent it as an exit strategy
Single Family
This niche may be the most common investment for first time investors. Here you can buy it, fix it, sell it or rent it.
Duplex – Triplex – Quads
These are properties with 2 to 4 units. These are great investment sources as you can receive a nice cash flow from multiple units. There are people that use them for their primary residency when starting out investing and rent the rest of the units. Those extra units pay for the mortgage and create an additional cash flow.
Small Apartments
These are units with more than 5 units and up to units. Here you can get great cash flow , but the cost to run them are much higher than single family homes as depending on the amoutn of units you may need a management company and a handyman that will do repairs on a regular basis. But the benefits outweigh the negatives. The cost of financing is higher but many owners understand this and may be willing to do some type of owner financing so you don’t have to come out with the entire amount for a down payment. So here you can be creative and sellers my be able to work with you.
There are other niches that you may want to start later on, as you have acquire some knowledge in other areas.
- Large Apartments
- Commercial
- Tax liens
- Notes