Real Estate Strategies for Beginners and Experts | Groundfloor

Investing in real estate is one way to diversify your investment portfolio with a less-volatile asset that's unique among other assets. Not only do real estate investments enjoy tax benefits, but you can use leverage for higher returns overall. Here are 10 strategies used by both beginners and sophisticated investors alike:

1. Mortgage lending: Purchase mortgages from banks or mortgage companies as an investor looking for capital gains on the sale of the property. Then, make loans yourself using these same lenders' funds (with interest rates set at government auction).
2. Buy Leasebacks: Renovate old properties and sell them back to the same company or individual who leased them to you. 
3. Buy-and-hold strategy: Purchase a property, hold it for a set number of years, and then sell. Warren Buffett and Jack Bogle, two of the most famous investors in America, have both praised buy-and-hold as an ideal way for individuals looking to create long-term success with their investments, instead of  worrying about short-term market fluctuations or technical indicators that can sometimes be misleading.
4. Pre-construction investing: Invest in pre-construction properties to get in on the ground floor of new developments in areas with high potential for appreciation. The pre-construction market is a great place to invest in real estate. Not only does it enable you to buy properties at discounted rates, but there are some projects where the value will appreciate before your investment has even been completed. If long-term stability and profit expectations are what you're looking for, then this type of purchase could be worth your time. As with any investment opportunity, though, you should understand all factors involved, including risk factors such as delays or cost overruns.
5. Fix-and-flip strategy: Purchase a property, make necessary repairs and/or renovations, and then sell it for a profit.
6. Wholesaling: Find properties at a deep discount, then find a buyer willing to pay more and pocket the difference. When an individual, the “wholesaler,” purchases a contract from the seller of the property and then sells it on their behalf, the current owner pays them for this service - often through percentage fees attached to the overall cost of the home. Wholesale is a great way to make money in the real estate market without having to put any money down on the property itself.
7. Tax lien investing: Purchase tax liens from municipalities; then, when homeowners don't pay their property taxes, you can foreclose and take ownership of the property. Many investors seek out property tax liens as an alternative avenue for providing themselves with a decent return on their investments - although there is always risk involved when buying such assets. Tax liens can offer knowledgeable buyers high-interest rate returns, but if you are a beginner investor, you should consult with experts who understand all aspects before investing.
8. Rent-to-own strategy: Also known as a lease option, this strategy allows you to purchase a property while giving the tenant an option to buy the property at a later date. Rent-to-own houses are a new type of real estate that allows you to get the best of both worlds. You can live in an apartment or house without making any large down payments, but eventually, your investment will allow for ownership and more equity as well.
9. Sandwich lease: Purchase a property, lease it to a tenant, and then sub-lease it to another tenant; then, collect rent from both tenants and pocket the difference. The lease agreement is an important part of any real estate investment. It's common for investors to have more than one property, and they may want someone else to manage their properties while still making sure that everything runs smoothly. This way you can concentrate fully on your own accomplishments without worrying about how much time might be needed just because another person needs help taking care of all these details.
10. Commercial real estate: Invest in larger properties such as office buildings, warehouses, or retail space.