SS192: The Hidden Gems of Real Estate Investing

SS192 The Hidden Gems of Real Estate Investing

Real estate investing offers a variety of opportunities that can provide unique advantages and potentially higher returns. In this episode, Charles discusses these hidden gems and how to diversify your portfolio, tap into niche markets, and potentially achieve higher returns than traditional investment avenues.

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Talking Points:

  • Tax Liens and Tax Deeds: When property owners don’t pay their taxes, the government can place a lien on the property or auction off the property to recover the unpaid taxes.
    • Tax liens are liens against properties for unpaid property taxes. The government sells these liens at a public auction to recover the unpaid taxes, and investors can purchase them by being the high bidder. Typically, there will be a redemption period where the property owner can repay the taxes owed and the investor’s interest to satisfy the tax lien. If the owner fails to repay during the redemption period, the investor may begin foreclosure and take ownership of the property.
    • Tax deed investing is where the ownership of the actual property is auctioned off because of unpaid property taxes. The highest bidder receives a tax deed, giving them property ownership. This strategy is more in-depth since the investor is actually taking ownership of the property versus in tax lien investing, where the investor usually hopes that the property owner will pay their back taxes, interest, and fees. Never having to purchase the actual property.
  • Raw, Undeveloped Land: Raw land investment involves purchasing vacant land in the hopes of the property appreciating in value, selling it to a developer, developing it themselves, or possibly selling or leasing it for recreational use like hunting, camping, or motorsports.
  • Live-In-Flip: This strategy is a hybrid investment approach. Instead of just buying a property to live in or flipping a property, the investor incorporates both. They live in the property while renovating and selling it for a profit. It may be inconvenient to live in a property while it is being renovated; however, investors who have made the property their primary residence for at least two years can now take advantage of capital gains exclusion tax benefits available on primary residences.
  • Lease Options: A lease option, also known as a rent-to-own agreement, gives a tenant the option to purchase a property at the end of the lease term. This allows tenants to become property owners after actually living in the property. At the end of the lease period, tenants can exercise the option or not. Great for tenants who want to become property owners but cannot currently qualify for a mortgage, are not sure they will like the property or neighborhood or are unsure if they will be moving after the lease term. It allows tenants to lock in a future price, which can be advantageous in a growing market.
  • Subject-To Financing: Subject-to or sub-to financing is a creative financing strategy where the investor takes title to the property. Still, the mortgage remains in the original owner’s name. For all intents and purposes, the investor is taking over the mortgage without officially assuming the loan. This allows an investor to purchase a property with little to no down payment without obtaining a mortgage. The investor begins paying the mortgage, and typically, usually within a few years, the investor will sell the property or refinance the property and pay off the original owner’s loan.
  • Private Lending: Becoming a private mortgage lender allows the investor the ability to earn higher-than-normal returns on short-term mortgages to real estate investors. These loans are typically utilized to flip distressed properties in a 6–12-month timeframe. This strategy requires an investor to have the mortgage funds, but once the loan is made, the monthly interest payments are passive income.

 

Exploring these hidden gems can offer unique opportunities to build and diversify your real estate investment portfolio. However, each strategy comes with its own risks and challenges, requiring investors to carefully consider all aspects of the strategy before getting started.

Transcript:

Charles:
Imagine buying a piece of land; a few years later, it’s worth triple the price. Sounds like a dream? Let’s make it a reality.

Charles:
With over a decade of hands-on experience and many transactions under my belt, I’ve found some hidden real estate gems, and I’m excited to share them with you in this episode.

Charles:
Only 1 in 10 investors know about these secrets. These aren’t your typical real estate investments, but they can be incredibly lucrative if you know how to navigate them.

Charles:
Welcome to Strategy Saturday. I’M Charles Carillo, and Today, I will reveal the secrets behind the hidden real estate gems that can change your investment game forever! Trust me, you won’t want to miss gem number 6. Let’s uncover these exciting opportunities together.

Charles:
Number one is tax liens and tax deeds. When property owners don’t pay their property taxes, the government can place a lien on the property or auction off the property to recover the unpaid taxes.

Charles:
Now, tax liens are liens against properties for unpaid property taxes, and the government sells these liens at a public auction to recover the unpaid taxes and investors can purchase them by being the high bidder. Now, typically, there will be a redemption period where the property owner can repay the taxes owed and the investor’s interest to satisfy the tax lien. If the owner fails to repay during the redemption period, the investor may begin foreclosure and take ownership of the property. Taxing investing is where the ownership of the actual property is auctioned off because of unpaid property taxes. Now the highest bidder receives a tax deed in giving them property ownership. This strategy is more in depth since the investor is actually taking ownership of the property versus in tax lien investing, where the investor usually hopes that the property owner will just pay their back taxes, interest in fees, never having to purchase the actual property.

Charles:
Number two is raw, undeveloped land. So raw land investment involves purchasing vacant land in the hopes of the property, appreciating in value, selling it to a developer, developing it themselves, or possibly selling or leasing it for recreational use like hunting, camping, or motor sports. Number three is live and flip. Now, this strategy is a hybrid investment approach. Instead of just buying a property to live in or flipping a property, the investor incorporates both and they live in the property while renovating it and selling it for a profit. Now, it may be inconvenient to live in a property while it’s being renovated. However, investors who have made this property of their primary residence for at least two years can now take advantage of capital gains exclusion tax benefits available on primary residences. Number four is lease options. So a lease option, also known as a rent to own agreement, gives a tenant the option to purchase a property at the end of the lease term.

Charles:
Now, this allows tenants to become property owners after actually living in the property. At the end of the lease period, tenants can exercise the option or not great for tenants who want to become property owners but cannot currently qualify for a mortgage or are not sure they will like the property or their neighborhood, or unsure if they’ll be moving after the lease term. It allows tenants to lock in the future price, which can be advantageous in a growing market. Number five is subject to financing. So subject to or sub to financing is a creative financing strategy where the investor takes title to the property. Still, the mortgage remains in the original owner’s name. For all intents and purposes, the investor is taking over the mortgage without officially assuming the loan. This allows an investor to purchase property with little to no down payment without obtaining a mortgage.

Charles:
Now the investor begins paying the mortgage, and typically, usually within a few years, the investor will sell the property or refinance the property and pay off the original loan owner’s loan. Number six is private lending. Becoming a private mortgage lender allows the investor the ability to earn higher than normal returns on short term mortgages to real estate investors. Now, these loans are typically utilized to flip distressed properties in a six to 12 month timeframe, and the strategy requires an investor to have the mortgage fund available, but once the loan is made, the monthly interest payments are passive income. Exploring these hidden gems can offer unique opportunities to build and diversify your real estate investment portfolio. However, each strategy comes with its own risks and challenges requiring investors to carefully consider all aspects of the strategy. Before getting started, now we want to hear from you.

Charles:
How can you profit from properties that others have overlooked? Share your thoughts and questions in the comments below. Please remember to rate, review, subscribe, submit comments and potential show topics@globalinvestorspodcast.com. If you’re interested in actively investing in real estate, please check out our courses and mentoring programs@syndicationsuperstars.com. That is syndication superstars.com. Look forward to two more episodes next week. See you then.

Charles:
Have you always wanted to invest in real estate, but didn’t have the time, didn’t know where to find the deals, couldn’t get the funding and didn’t want tenants calling you. Since 2006, I’ve been buying income producing properties and great locations that provide us with consistent passive income. While we wait for appreciation in the future and take advantage of tax laws while we’re waiting and unlike your financial advisor, we invest alongside our investors in every property we purchase. Check out to investwithharborside.com. If you like the idea of investing real estate, if you like the idea of passive income partner with us at investwithharborside.com, that’s investwithharborside.com.

Announcer:
Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Syndication Superstar, LLC, exclusively.

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