WHY YOU’RE INVESTING IN REAL ESTATE THE WRONG WAY
- Solomon Floyd
- Aug 28, 2020
- 3 min read
Dear real estate investors – it’s time to change the game. No one likes hearing that they got it wrong, BUT you can’t achieve massive growth playing by the old rules.
Don’t stress, though. We have laid out all the old habits you need to break to grow your rental portfolio into the best one it can be.
Give some more background here as to why this is being written, it should read like “We studied data from our clients' rentals and compared it to that of a typical investor. Our goal is to educate you on the creation of an investment strategy that will allow you to outperform your competition.”
Staying in your backyard
There are certainly obstacles to investing out of state or even areas that require long drives to get to. But, if you refuse to leave your own backyard, you could be missing out on incredible opportunities that truly deliver a more sustainable form of real estate investment.
Moreover, let’s say you live in a major city. You know the city well, have built connections and perhaps even have your eye on a neighborhood you just know will be the next hot spot to blow up. The only problem is this – primary markets limit your returns in a major way, by allowing many investors to continuously drive the market price through the roof, thus alienating and damaging the future returns for the rest of the investors. Many of you may think “yea that makes sense, only the fittest can survey in this game”, although that is true, you will miss out on opportunity more frequently due to the sheer number of investors who are making offers on the same properties as you.
The biggest opportunities are usually found in secondary and tertiary markets – small cities and towns outside of primary markets. It’s what we’ve based our whole strategy on, and for good reason. Reunion Investments has partnerships in place in various cities across the United States that give us the ability to purchase cheap properties, without fear of competition or uncontrollable appreciation in value. Real estate investments like these are the reason we’re able to deliver many of our clients an average of 35% ROI.
Being a follower
When has following the crowd ever worked out for anyone? Sure it’s easy to see a neighborhood blow up and know that investment properties are delivering very solid returns for those that got in early. But at that point, you’re probably too late. Your returns are capped at the average 10 or so percent, there are plenty of options for buyers or renters, and there’s a lot of competition.
With our innovative strategies, we can help you build a profitable portfolio that generally outperforms average returns by twice or more.
Fighting for pennies
Another problem with investing in primary markets is that there’s so much competition that you end up fighting over small dollar amount differences. This is due to high land cost, high home cost, and low returns because you’ve likely only made a single real estate investment.
Even more importantly, investing in primary markets leaves you at the mercy of everyone else. You have little to no control over your investment and the state of a neighborhood, much less the city as a whole.
The ability to drive the market is one of the biggest benefits Reunion offers that virtually no one else can. When we go after opportunity zones in tertiary markets, most of the time we’re able to control enough of a city to truly drive the market. Economic development drives higher prices for the entire area, helping the economy grow and improving the quality of life for that area’s residents.
Settling for an investment firm that’s not transparent with you
We get it – nobody wants to invite competition into opportunities they’ve found. That’s why many investment firms, especially when it comes to real estate investing, keep their secrets to themselves. Hard to think those firms are really on your side, even though you’re the most important part of their success.
At Reunion Investments, we are fully transparent with any market information we’ve found, as well as opportunities that are up for grabs. We share things openly with our investors, as well as on social media. You can follow us on:
Avoid these outdated pitfalls when you’re investing in real estate. Better yet, give us a chance to help you make the most of your next venture. Give us a call anytime at 214.438.4809 or email us at Reunion@higherc.com.
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