The Billionaire Approach to Investment

Ugly ducklings turned beauty queens are not just show business ideas that sell; they are the multi-billion dollar strategy of billionaires like Donald Trump and Warren Buffet. Trump buys run-down old lots and builds landmarks; Buffet buys ailing companies and turns them into powerhouses. The same principle works in real estate business.

The current market situation has spawned an oversupply of residential homes. That presents a lucrative market for smart real estate investors. In some areas like Southern California, there are not enough homes for the many who want to move there; this market situation makes appreciation rates rise considerably. This is already happening now. In other areas like Charlotte, North Carolina, the rental market has high vacancy rates. Rental properties are available for large discounts. These market situations make it an excellent time to apply the billionaire approach to real estate investing.

Buy the most undesirable piece of property on your market. Invest some time, money and effort to give it a makeover. If cosmetic surgery, personality coaching and diet can turn ugly ducklings into swan, a little repair here and there and general tidying up of a property can turn it into a fantastic home buyers would be running after.

Leverage Your Investments

Of course, there’s that question of funds in this approach. You can leverage your investments in two ways: You can either take out loans from the banks and to finance the renovations or you can play middleman match buyers with properties and properties with investors.

The first approach is rather difficult for small and medium-size real estate businesses. For one, banks are now tightening on loan applications. You may need to fulfill more stringent requirements to even be granted a loan. And even if you have the time to sit out the process, there’s no guarantee you’d get the loan, especially if you have not acquired the reputation as a reliable investor yet.

The second approach is the more sensible route for small firms, even individual real estate players. With the right skills, tools and connections, you don’t necessarily have to use your money to fund the makeover projects for your buyers. Savvy real estate investors mine the MLS for good deals, match buyers with properties and find financing companies, usually, bigger real estate development firms to fund the required makeover.

Although that may sound simple, the market does need skilled real estate professionals to match these three things for all parties to clinch a good deal. There are many companies looking for good investments and properties with interested buyers waiting are good investments. Buyers look for specific properties within a particular price range. You role as a real estate investor is to bring buyer, investor and property together to a closed deal where everyone, yourself included, feels like a winner at the end of the day.

Now, if you had to do that by yourself, that’s tough work. But if you had an automated real estate system you cut the chase in half. You stay a step ahead of your competition because you have all the market information tools you need to respond to leads as quickly as possible. It’s works like a 24/7 assistant.

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