Powerful Strategies For Real Estate Investing

Carefully consider the strategies in this article to determine which method of real estate investing would be right for you!

When it comes to real estate investing, there isn’t a one size fits all strategy. It entirely depends on the type of property, your investment goals, and where you’re at in your investing career. Consider the strategies below to help you determine which type is right for you!

Fix and Flip Properties

A fix and flip is a strategy used when an investor purchases a property in need of updates, TLC or major improvements; the investor renovates the home and then sells the property for a profit. In house flipping the objective is to buy low and sell high. You’ll want to carefully analyze the current market conditions to ensure you’re coming out ahead. In this strategy it’s also important to complete renovations and sell the home as quickly as possible to get the monthly mortgage payments off your hands. In order to make this strategy a powerful investment, you’ll want to make sure you have adequate resources. Making sure you have a trustworthy team of contractors, builders and lenders is key.

If this is the approach you’re planning for then check out our blog post on the most efficient way to finance a fix and flip. 

BRRRR Method

BRRRR stands for buy, rehab, rent, refinance, and repeat. This strategy is similar to fix and flip, however, with fix and flips the intention is to sell, and with BRRRR’s the strategy is to use the property as a rental. Ideally, you would purchase a property and enhance it enough to rent it out for an amount that not only covers the mortgage, but also produces passive income. The third R in BRRRR stands for refinance. Once you’ve made improvements and have secured tenants, you can use cash-out refinancing to obtain capital for a new deal, which explains the fourth R, repeat.

This strategy is best suited for a more seasoned investor, who has experience with investing in rental properties.

House Hacking

House hacking is a way to generate income from the property you live in. This strategy works really well with multifamily properties. You can live in one unit while renting out the other units in order to cover the mortgage and generate income. House hacking is an excellent strategy for a new investor or someone who does not plan on becoming an investor full time.

Accessory Dwelling Units (ADUs) are another form of house hacking, increasing in popularity due to the flexibility and affordability. ADUs are small, additional units built onto an owner's existing property. They must meet specific requirements in order to be considered an ADU.

You can learn more about ADUs and how to acquire financing here!

Buy and Hold Rentals

With the buy and hold strategy you can either invest in a short-term rental or a long-term rental. The difference between these strategies is the amount of time you hold the property for. 

In a short-term buy and hold you would plan to keep the rental for a short period of time, between 1-5 years. Usually during this time the investor would do things to add value for when they sell the property.

A long-term buy and hold strategy is done with the intention of holding onto the property for a long time and renting it out for rental income and appreciation. This is a slow and steady strategy, but can be very successful, especially for properties in desirable locations.

Consider your resources, your personal investment goals, and where you’re at in your investing career to help you decide what type of property and which investment strategy makes the most sense for you!

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About CALCAP Lending

A division of CALCAP Advisors, CALCAP Lending benefits from the expertise of a seasoned team of professionals with extensive, successful track-records covering a variety of disciplines and leading large, nationally-recognized institutions. A private money direct lender, CALCAP Lending provides short to mid-term financing for property investors and businesses looking to purchase, refinance, renovate, and construct residential or commercial properties.

Lending FAQs

You've got questions, we've got answers.

What is private money lending?

Private money lending is a collateral-based lending strategy that is often associated with shorter terms and more attractive features. A private money loan offers more flexibility than a conventional mortgage or bank loan.

How does a private money loan work?

Private money lenders provide financing using money from private entities. Private money loans often work as bridges to help investors gather funds to achieve their short term real estate goals, but long term, permanent options may also provide.

Why would I choose a private money lender?

There are many advantages to using a private money lender for your real estate investments! Private money lenders can be more lenient when it comes to borrower credit issues, often there are no prepayment penalties, you can leverage your cash to buy multiple properties, and private money loans are quicker when compared with institutional loans.

Can I get prequalified for a loan?

CALCAP has a responsive loan team who are able to prequalify you. Contact a loan specialist at 833.816.5580 to get started.

How long does the lending process take?

Private money lending can be a quick and painless process. From start to finish, 30 days is common, however, turn around times can be as short as 10 business days.

Can I still be approved for a loan if I have bad credit?

Generally yes, we understand that people have temporary financial issues that come up, and we want to work with you to help you rise up financially to a better place. Offsets to credit concerns may include experience as a real estate investor, good cash reserves, and/or larger down payments.

I am a broker or investor, how can I work with CALCAP?

Business is built on relationships. Ours is no different. CALCAP Value and Preferred Partners receive exclusive rates and services. For more details and to submit your application, visit our partners page.

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