The 4 Stages of Finding Your Niche Real Estate Investment Strategy

Posted by Chris Clothier on Mon, Jul 24, 2017

realestateinvestment-niche-realestatemarket.jpgHave you ever felt overwhelmed by options?

Fast food restaurants have space-age drink machines with 300 combinations of soft drinks. We’ve given endless choices at the grocery store, when shopping for clothes, when selecting shows to watch on Netflix.

Real estate investors, whether we realize it or not, are faced with the same slew of options when it comes to our investments. While it might seem like there’s just a handful of ways to go about this whole investment thing, new investors quickly find that there’s a whole world of strategies, variations, niches, and markets out there.

It’s invaluable that real estate investors find their niche! Once you do, you will find yourself more excited about investing, more motivated to jump ahead of the game, and more adept and specialized at investing in your particular niche. You’ll be able to make better deals, attract and retain tenants, market more effectively, and, most importantly—increase your cash flow.

So how do you find it?


The 4 Stages of Finding Your Real Estate Niche

Stage 1: Experimentation

The only way you’re going to find your niche is to try out different ways to invest. It also means trying different strategies within particular methods. For instance, you may start out investing in single-family properties. If you’re not in a market that excites you, that can affect your opinion of it! Maybe you’d prefer it if you were in a college town, or near young professionals, or in a particularly hot market. You would feel differently about it than if you were say, starting out in your local market, where demographics might be mixed and and demand is average.

It starts with experimenting—learn what kinds of investments are out there, what’s within your reach, and chase after what interests you. It’s a game of trial and error—but you don’t have to go in blind. Start by writing out a wish list. For example:


  • Passive income
  • Quick scaling
  • Market access

You can also write things you know about your personality. If you know you like to take charge and be at the ground floor, recognize it. If you prefer to let others handle the details, know that too. It’s all going to influence what you’re going to enjoy when it comes to investing in real estate.


Stage 2: Experience

Experience is always the best teacher. For real estate investors, it’s especially true. Even hands-off investors are going to learn whether or not they enjoy being passive! Some people prefer to be hands-on, and they’ll discover that with experience, and learn that a different kind of investment strategy is going to be right for them.

Through experience, you’ll learn what you love. What’s important is balancing your risk while you’re gaining experience. No matter what your strategy is, focus on due diligence, excellent service, and maintaining positive cash flow.

 

Stage 3: Self-Discovery / Identity Crisis

After you’ve gained experience as a real estate investor, you’ll reach a point where you’ll know a few things. You’ll either really love what you’re doing, feel lukewarm about it, or you’ll be ready for a change. It might stress you out or make you excited. Deciding what to do with your feelings about investing versus deciding what is a rational, strategic response can be a challenge.

Ultimately, you have to look at what you will enjoy doing in the long-run. Real estate investment is a self-directed investing strategy, so you need to like it. If you don’t, maybe it’s time to go back to the drawing board and look at another way to approach the business.

 

Stage 4: The Click

In Cat on a Hot Tin Roof, Tennessee Williams has a character refer to waiting for the click. A moment in which he goes from feeling anxious, angry, or unsettled to feeling a sense of peace. For real estate investors, we have a “click,” too. The final stage of finding your niche in real estate investment is simply that moment when it all works.

You realize that yes — this is it! Sure, you might hold other types of real estate investments and continue to experiment, but your primary passion is for this kind of investment. Whether it’s flipping, wholesaling, or being a passive investor through turnkey investments, you feel at home and at peace with where you are.


It just clicks.


Clicking with a type of investment isn’t just about a feeling, either. It might mean it just makes the most sense for your lifestyle or your personality. Or, more practically, the strategy, laws, and actual business side of the investment comes a lot more naturally to you than it does with other kinds of investments.

That’s when you know you’re in the right place.

Have you found “the click” in your real estate investments? Share what’s been working for you in the comments!

 

Want to give turnkey real estate investment a try? You can start earning passive income now.

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Topics: real estate investment