Better Focus

In this post, I talked about the FREE audio recordings available at REIClub.com. I've been listening to them every day to/from work, and they've actaully opened my eyes to a lot of things - mainly how marketing is key to the business. I won't say I hadn't known this before, but listening to these tapes, the underlining message in all is that without marketing, you have no deals. And my marketing just plain sucks. The second message I'm getting from each of these tapes is to choose only one or two niche strategies, and focus all your energy on becoming an expert in them. What I've realized is that I'm spending too much effort in trying to learn the whole industry, when I should be focusing in on only 1-2 strategies. In essence, my thinking beforehand was becoming a "jack of all trades, and a master of none", when it should have been the opposite. Therefore, I've taken the last few days to really focus on what kind of strategies I want to do, given my time, my financial resources, state laws, and so on, and choose one or two from the list. In doing so, I've narrowed my list down to one main buy strategy and two main sell strategies (although there are derivatives of each).

Buying Strategy
I've always fancied Subject-to (Sub2) real estate investing. While it may require cash out-of-pocket at times, it is truly one of the best ways to get into a property with practically no money down. There are many other upsides as well, for example quick closing, no banks, more flexibility, easier marketing, and so on. I'll still be looking at other properties from my agent, my main focus now will be on acquiring Sub2 properties almost exclusively.

It's interesting, because I have William Tingle's Sub2 course, and he follows his own ideaology of Subject-to investing. I recently listened to John Locke's audio tape regarding Sub2 investing, and while he uses Sub2 investing, his ideaology is a little different. For example, William Tingle suggests using Land Trusts for anonymity, while John Locke says he's never used one before. Just little things like that which make their approaches slightly different.

Exit Strategy #1
Since Lease/Options have just about been outlawed in the great state of Texas, I have to find an alternative. Cash For Deed was basically outlawed in 2001(?) here as well. That basically cuts off two good exit strategies from the list. One of my mid-term goals is to acquire enough properties so that my cashflow is $15,000/month. This will require that I acquire many properties and hold them for both cashflow and equity build-up. Therefore, straight renting will be my first exit strategy. In doing so, I have to make sure the NOI, coupled with the debt service, cashflows positive.

Exit Strategy #2
The second exit strategy I'll implore is for generating cash reserves. Again, Lease/Options are basically illegal in Texas now, so I'll need a way to flip the properties retail. At first, I thought about just using an agent to sell the properties, thereby freeing some time for myself. However, the more I read about seller-financing, the more intrigued I am about the benefits. I'm not saying I won't use a RE agent, but my main exit strategy focus will be on seller-financing.

Summary
There you have it ... My new focus in REI. Again, while these strategies will be my main focus, they won't be my only focus. However, I'm not going to be spending a whole lot of my time on other strategies. I guess, if I see a property or someone brings it to my attention, then I'll take a look, but I'm not going to be actively looking for properties anymore. In fact, it will be just the opposite ... the properties will be looking for me. ;-)

Again, marketing is the lifeblood of any business, and REI is no exception. Therefore, my first order of business now is developing a good marketing plan and executing it. I have a lot of ideas scribbled down and still in my head. I'll take the Thanksgiving break to sit down and really devise a strategy to take my marketing to a higher level.

Stay tuned.