Real Estate Investment Options & Info
Slideshow slides
Basic Options
Active
Buy & Hold
Buy & Flip
Lease to Own
Vendor Take Back
Construction/Dev
Rezoning
Unique Property
Passive
MIC’s
REIT’s
RE Investor
Private Lender
This presentation will be on Buy & Hold, Buy & Flip, Lease to Own
Buy and hold
Buy a Property for the Purpose of Renting it to a Tenant
Collect a monthly rent cheque
Responsible for the home’s condition — depends on rental agreement
Must qualify for both mortgage payments
Benefits
Potential for Positive Cashflow
Equity Investment Savings
Can Use a Mngmt Company for Low time & Energy Output
Exit Strategy — New Renter, Lease Property, Sell
Downfalls
Potential for Negative Cashflow
Decrease in Property Value
Renters Damaging Property
Property Maintenance
Qualifying Upon Renewal
Buy and Flip
Buy a Home Below or at Market Value, Renovate/Improve & Re-Sell in 1-3 months
Dependent on Contractors/Materials
Strong Market Understanding
Good Timing is Needed
Must Qualify for Both Mortgage Payments
Benefits
Potential for Quick Capital Gains
Transactions Can Be More Frequent
Exit Strategy — Sell
Downfalls
Expensive Cost of Entry
High Risk of Investment
Dependent on Contractors/Materials
Wont work in a Declining Market
High Output of Energy & Time
Difficult to Qualify for Mortgage
Conventional Lenders Don’t Like You
Lease to Own
Buy a Home & Lease to a Tenant
Pre Approve Tenant Ideal
Option Agreement, Pre Agreed Upon Price
Exit Strategy — Sell, Rent, New Tenant Buyer
Benefits
Receive Instant & Ongoing Cashflow
Have a “Guaranteed”, Pre Qualified Buyer
Low Maintenance
No Turnover or Vacant Suites
If Tenant Buyer Leaves, Property, Down Payment & Credits are Yours
Downfalls
Tenant Buyer Leaves & Property Value Falls
Tenant Buyer Doesn’t Qualify to Buy at End of Option Term
Badly Drafted Option Agreement
Difficulty Finding Tenant Buyer
Must Qualify for Both Homes to Qualify for Mortgage