In the previous post, we talked about why people may not get started yet investing in real estate even with all the amazing opportunities in today’s market, especially the Hawaii real estate market. After all, real estate has one heck of a track record, especially when compared to other investment options like risky stocks and bonds. But many people think that jumping into real estate is beyond their reach. Let’s squash that! Here are just some of the…
BEST WAYS TO GET STARTED CREATING WEALTH WITH HAWAII REAL ESTATE:
1. FLIPPING HOUSES. Flipping houses in Hawaii can bring an amazing return on investment. Profits of $100,000 or more are there to be had for the right deal. Of course, it can take a while to put all the pieces together of a proper house flip. You have to market for the deal, compete with other Hawaii investors, get the right contractor or handyman and line up the capital. And we all know you need some capital to flip houses in Hawaii! But if you can do it, you may find yourself leaving your regular 9 to 5 job (if you want high-level coaching for flipping houses, click here).
How to get started: Organize your business structure, find investor-friendly real estate agents who can help find you deals, align yourself with a good general contractor and start marketing for deals! Learn how HERE.
2. BE A LANDLORD FOR CASH FLOW. Let’s face it — flipping houses means taking an active role. However, many real estate investors don’t want to do that much work. Instead, identifying properties that produce positive cash flow in Hawaii on a monthly basis can still allow you to invest in real estate without having to worry about all the pitfalls that can happen during a flip. Passive is the name of the game here. If you can put down a healthy mortgage payment or get yourself a deal on a desirable condo in Waikiki, then you could pocket a few hundred bucks a month — while sipping mai tais on your lanai.
How to get started: Figure out how much passive income you want per month. Get a good agent who will keep their nose to the grindstone and get you first crack at properties when they hit the Hawaii MLS. And have your CASH or pre-approval ready to go!
3. WHOLESALING REAL ESTATE. A popular way for new investors to get started, wholesaling real estate basically means finding deeply discounted deals and re-selling them to active house buyers, usually other house flippers (like us!). You’ll have to market hard and work your networking, but wholesaling gives you an opportunity to make money in real estate without using much, or any, of your own cash.
How to get started: Line up your list of active cash house buyers (like us!) who can act quickly to buy your deals. Then start marketing and marketing and marketing some more to find people who would benefit greatly to sell their house fast for cash. Make the connection and get paid!
4. PRIVATE MORTGAGE LENDING. Private mortgage lending is where you invest your money in another real estate investor’s house flip, namely by acting as their bank. You fund the escrow account before closing and get a recorded lien against the very property being flipped for full collateral along with a rate of return that you’re happy with. Once the house flips you get paid back your principal plus all the accrued interest. For many people, this is both a passive and lucrative way to invest in real estate without being directly involved in house flips. With the banks offering peanuts and stocks volatile, more people are becoming interested in this method of investing.
How to get started: Talk to professional real estate investors who flip houses and ask if they work with private lenders. Do your homework, ask for references and feel free to have your attorney review everything. This is about building a winning relationship and any investor worth doing business with will have an open book philosophy and take care of all your investment needs.
These are just three options for investing in Hawaii real estate. There are, of course, many other methods available like investing in commercial real estate such as strip malls and apartment buildings. We certainly have a lot of apartment and condo buildings in Hawaii! You could also buy a discounted house for cheap and just watch the price appreciate, although this wanders into the range of speculation. You can even do your own development if you have the expertise and vision.
Whatever you choose, perhaps the best advice beyond just having the willingness to get into Hawaii real estate in the first place, is to align yourself with PROFESSIONALS. Going it alone is a surefire recipe for either slow growth or disaster, in my opinion. Whether it’s another investor, a real estate investment company, a contractor, agent, attorney or other industry pro, get your team together and take control of your financial future!