Before my partner and I built the foundation for Eighteen Capital Group (18CG), I started buying and flipping residential properties around the age of 36. Flipping residential homes in the Kansas City area soon became a passion of mine, and a few years later with a couple of flips under my belt, I was ready to elevate this hobby of mine. Within the next few years, I went into the apartment building and management business where the idea for Eighteen Capital Group came to life.
My career has been shaped by making smart and informed real estate investments–as this market has the ability to bring great wealth to individuals who have a keen eye for investment, economics, and of course, risk. With the right strategies, real estate investments can generate extra income and propel your business forward.
If you have an interest in real estate ventures but are unsure of where to start, here are three of my top strategy recommendations.
1.) Fix it and Flip it
Flipping houses was my first step through the door of real estate investments, and it truly gave me a deeper appreciation for the industry as a whole. You value the time, the money, and all the details that go into each renovation. The fix and flip strategy is optimal for those who like a good challenge. The key to flipping a home is locating a property that exudes potential. You’ll want to think carefully about the location, the market, and the type of client the finished product will draw in. The fix it and flip it method is an excellent way to generate cash and support future projects.
2.) Rentals and Short-Term Buys
Holding short-term rental properties–typically one to five years–allows for property appreciation through rent prices, remodeling, and lower expenses. On the other hand, short-term buys are quite beneficial for those who invest in multi-unit apartments or have various flipping projects. Short term buys and rentals tend to work best in higher prices markets.
3.) Real Estate Investment Trusts (REIT)
For those who are interested in real estate investment, but don’t have the time to be too hands-on during the process, you may want to weigh the option if REITs. Real estate investment trusts allow individuals to invest in real estate without the need to be involved in every step of the way. But first, you have to select the type of REIT that will be most beneficial for you and your specific needs:
- Equity REITs: property investments
- Mortgage REITs: mortgage investments
- Hybrid REITs: a mixture of property investments and mortgage investments.
While it’s essential to select the type of real estate investment trust that works for you, do note that each of them offers higher yields. This means you will receive a return in finances from the interest that others are paying on their mortgages.
What started off as a hobby, turned into a long-time and successful career for me. With the right strategies and mindset, the same can happen to you too. I hope you find these strategies useful in your next real estate investment endeavor.
~ Michael Gortenburg Kansas City, Missouri