As I’ve talked about in other articles, there are only three reasons to be in the business of real estate: quick cash, monthly income, and long-term wealth from property appreciation and debt pay down. Recently, I’ve discussed some of the different ways to generate quick cash in real estate, as these techniques or niches can provide attractive and convenient way to get your foot in the door as an investor.
As a final thought on the idea of generating quick cash, I want to encourage you to look at apartments, not just in the sense of monthly income or asset value long-term, but rather as a quick cash commodity you may not have given much thought to before.
Here’s the basic premise. Quick cash is a very good thing. It won’t make you wealthy as a real estate investor but it can put food on the table, free up your lifestyle, and send you on your way to a wealthy future. Having rehabbed over 450 properties in just a seven year period, I know the value of quick cash deals and also understand what it’s like to be used to those big checks coming in.
What I also realized in doing these kinds of deals was that if I didn’t continue to find, negotiate and complete more deals, the cash could and would dry up eventually, leaving me back at the drawing board. So I changed my strategy. While those big rehab checks were coming in, I had plenty of money on which to live so I also put money aside so that I could later invest it in bigger deals like apartments. How to successfully use revenue from one arm of your business to fuel another will be the subject of another article so stay tuned for more on this important concept.
When I started working the apartment business, I discovered a commodity that was unlike any that I’d seen in real estate before. The sellers and buyers were almost all investors, and investors have a knack for thinking creatively. That really appealed to me and I also started to see some different ways to do deals that I hadn’t really thought of before.
There is an adage that successful people profit from the mistakes of others. It doesn’t mean they walk over other people; it just means they are opportunistic. The mistake I saw was that there weren’t more investors out there working with apartments but I was determined to capitalize on what I felt was a business with less competition than other types of real estate.
I quickly learned that doing a deal with a multi-unit or apartment building took just as much effort as doing a single family home deal, but there was one big difference that made me really excited. In almost all cases, when I closed a deal, there was an extra “0” at the end of the profit check! I knew I had to be on to something so stay tuned for the next installment on this topic.
