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Real estate investment strategies to grow and preserve wealth

Strategies across property types, capital stack, and risk profile.

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Real estate investment strategies can help beginners and seasoned investors reap the rewards and build wealth through the power of real estate investing. Real estate investing strategies cover various aspects such as financial analysis, evaluating potential investments, managing risks, understanding market conditions, and creating exit strategies to maximize returns.

Investing in real estate requires exploring numerous opportunities so that the perfect strategy can be chosen to achieve the desired financial goals. Achieving success with real estate investing requires established tactics, discipline, and commitment, but with the right approach, achieving long-term wealth through smart investment decisions is possible.

Real estate investment strategies across risk profiles.

Strategy Name

Fixed Income

Core real estate investment strategy

Core plus investment strategy real estate

Value add real estate strategy

Opportunistic investment strategy

Strategy Page NA CORE CORE PLUS VALUE ADD opportunistic

Strategy Goal

Wealth Preservation

Wealth Preservation

Wealth Preservation and some wealth-building

Wealth Building

Wealth Building

Description

The strategy involved in debt financing.

The strategy invests in fully leased properties with high-quality tenants.

The strategy invests in properties needing minor controlled improvements or properties located in riskier markets.

Value-add strategy investing in properties needing substantial controlled improvements.

The opportunistic strategy involves major development.

Example

Mortgage.

Office building in a major city downtown.

An office building with an 85% vacancy is in the secondary market.

Multifamily property with 90% vacancy, 1986 vintage requiring renovation.

Ground-up multifamily developed project.

Risk level and types

Lower Risk.

Market downturn.

Lower Medium Risk.

Low liquidity during a market downturn.

Medium Risk

Operational risks.

High Medium Risk

Operational risk.

Vacancy during renovation.

High Risk

Financing. Market change. Permiting. Land entitlement. 

Return

Dividend: 4-8%

Total: 4-8%

Dividend: 4-5%

Total: 6-9%

Dividend: 4-6%

Total: 6-10%

Dividend: 2-4%

Total: 8-12%

Dividend: 0-2%

Total: 10%+

Related hashtags

# low-risk real estate investing

#low risk real estate investment strategies

#low risk real estate investment strategies

Real Estate Investment Strategies

Fig: risk-reward real estate investment strategies. Source: paperfree.com

Real estate investing tax strategies

  • 1031 Exchange strategy, reinvestment in like-kind real estate
  • 1031 Exchange DST, reinvestment in more passive real estate investments.

Strategies across property types.

#MULTIFAMILY INVESTMENT STRATEGY #investing in senior housing

Invest across the capital stack

Risk Capital Stack Position Strategy Page
High

Private Equity Real Estate  General Partner.

real estate private equity 
High Medium Private Equity Real Estate Limited Partner. NA
Medium Private Debt Real Estate Mezzanine. NA
Low Private Debt Real Estate Senior Loan. NA

All Real Estate Investment Strategies

What is the best real estate investment strategy?

No one strategy fits all. It is very individual.
Each investment strategy has unique attributes:

  • potential return,
  • terms,
  • risks,
  • taxes,
  • other intangible benefits and losses (reputation, time, etc.) 

The most critical attribute for most investors is risk. Understanding all the risks of a specific investment strategy you are vetting is crucial. After strategy risk assessment, the next step is to align it with the risk margin of your capital. And decide to pass on the opportunity or move to deeper due diligence.

Example approach: 

  • The Fix Income Strategy is the most conservative strategy with the lowest risk. A fixed-income strategy may be a good fit for a developed investment portfolio when an investor is looking for stability.
  • The Opportunistic Strategy has the highest risk. The opportunistic strategy is a good fit for the fresh portfolio, which has time to recover from potential losses associated with high-risk investments.
  • There are strategies between Core, Core Plus, and Value Add strategies with a medium risk of potential capital loss.

The investment industry veterans suggest designing and running your personalized investment strategy empowered by diverse strategies; it would be a mix of different real estate strategies; the more, the better.

Example, portfolio design: 

20% of the total portfolio is allocated to alternative Investments,  where 20% is split 

  • 30% of 20% to Core real estate investment,
  • 30% of 20% to Value Add real estate investment,
  • 10% of 20% to Opportunistic real estate investment,
  • 30% of 20% to other Alternatives.

The Real Estate Investment portfolio is split between a few strategies real estate investment strategies: 
40% Core strategy, 30% Value add, 30% Fixed income, and 10% Opportunistic strategy.





Legal disclaimer

The performance quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. Standardized performance and performance data from the most recent month-end may be obtained by clicking on the fund names below.
This page contains only pre-market material.

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Keywords  #real estate investment strategies  #different real estate strategies #real estate investing strategies USR9-117D345


 
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Real estate investment strategies

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