It’s time for an upgrade.
No, not your computer software… though doesn’t it seem like your computer is always asking?
I’m talking about understanding very clearly whom you serve as a real estate entrepreneur. Yes, it’s a question I have asked a lot on this blog, and it’s worth getting you to think about again as you move into the New Year.
This post won’t be as long as most I’ve been writing this past year, but it packs a powerful punch to your brain cells. I want you to see that no matter what you do in real estate you’re serving someone and you have to be clear on who that someone is.
What about multifamily properties?
Some people think that in the multifamily property space you don’t have to understand your tenants who are renting from you, but if you want to be successful you really have to know them well.
For example, there are lots of different types of multifamily properties. One won’t be good for all people; you have to know the people for whom the property will work. Like families… do your units fit with families or singles better? Do they fit students or seniors? Do they work best with low-income earners or are they more toward the luxury end of renter?
See? One size does not fit all and you have to know whom you serve in a big way in multifamily… and then you have to know how to add value. In fact, you could turn $25 into $300K with the right value-adds!!
I wrote an article about this a while back. Did you read it? If not, no worries. Here’s a link:
But you like investing in single-family residences…
Okay, so investing in multifamily properties isn’t your cup of tea? Is that because you think you don’t have to know whom you are serving… or that any ol’ house will do for any ol’ tenant?
Oh, boy. That is wrong thinking.
Just like in multifamily properties, your single-family properties are not a one-size-fits-all deal. Or haven’t you driven around the neighborhoods in your city or town?
Truth is that there is amazing diversity between neighborhoods, no matter what size city you look at. Even the smallest townships have nicer ends of town and those parts that are considered the wrong side of the tracks.
You need to figure out who you are as an investor and then what type of person you want to be serving in the single-family-residence space. And I’m not just talking about renters either. You need to know the type of neighborhoods you want to be investing in because you’re going to need to be in alignment with investors who back your deals with their cash and credit… and if you intend to flip the properties you’ll need to have properties that are in alignment with potential buyers’ goals.
So, you see, you REALLY have to answer the question of whom do you serve when it comes to single-family properties!!
Months ago I was getting the question about how you decide where to invest, which boils down to whom you want to serve but goes further. So I wrote a little something about analyzing properties. If you missed this article, here’s your chance:
Now, what if you are tired of renting properties out in the traditional sense?
If you’ve been following me over the past six months or so, you already know what I’m about to say about how you don’t have to stick to the script of renting your properties out the old-fashioned way.
Yes, yes… I’m talking about how you can earn WAY more cashflow in your properties by doing short-term rentals.
For me that means vacation and corporate rentals. At the time of this writing I’ve created 16 of them and they are all doing just fine for me.
Plus, I’m having a great time creating beautiful spaces for traveling families, groups of friends, business groups and executives. I’ve hosted wedding groups, funeral attendees, people traveling to check out everything the OC has to offer and more. (Plus, I get to do this thing with my wife, so that makes creating these STRs extra-special to me.)
Think I don’t have to understand exactly whom our properties are serving? (Um, we do. We really, really do.)
If you want to earn more with your properties than you can just renting to long-term tenants, have you ever considered getting involved in short-term rentals (STRs)? In the right areas of the country… and even in various countries (where STRs are allowed to operate), this strategy can make a whole lot of sense for you.
But you know what? STRs aren’t the only game in town when it comes to creating something beyond the traditional rental property. You can change the use of your property to fit the needs of your community. Want a few ideas? Read this article:
The bottom line here is that no matter what you do in real estate investing, if you plan to be the best wholesaler, flipper, investor who buys and holds properties over the long haul or if you want to be the king or queen of the STR space… or you want to create group home experiences for a specific group of individuals… you will need to understand whom you intend on serving!!
As for me and everyone here at Cash Flow Diary… we serve you.
If you’re ready to take a great next step in your real estate investing education, here’s something you should check out. It will be a full-on course soon, so jump on it now (before it has the full-on course price):