Types of Real Estate Investing
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Types of Real Estate Investing


Count them. There are six different ways of
investing in real estate and in today’s video, I’m going to talk about all six of
them i’m going to share my personal biases on which ones I like and don’t like in
hopes that it helps you crush it in real estate investing. Hi Kris, I have a question about real
estate. I had bought a house and in a year turned around, sold it and made a
$100,000 profit. I feel like that was kind of a fluke. So my
question is, are there different types of real estate to invest in and what’s the
best one? Alright, so we’re going to talk about the six different types of real
estate, so many of you are asking me questions left and right, “Kris what
about mixed-use? What about industrial? Do you ever do anything with commercial
real estate? You talk a lot about single-family and what I want to do
today is I want to bring clarity and talk about the six different major forms
of real estate, the six different kinds and then I’m also going to give you a
little bit of my bias like, how do I actually feel about these different
kinds of real estate and why. Real estate number one – is probably the most obvious.
It’s residential right? I mean people need a place to live. That’s what
makes residential real estate such a sure bet is because population right now
as long as we make babies or you’re in a country where people keep moving in.
Guess what happens to population? It grows as long as the population gets
bigger, supply and demand, we’re going to need more what? We’re going to need more
houses. So I’m a huge fan of residential real estate. It’s been something I’ve
specialized in. A couple of pros and cons that I love about it, is that when you
buy single-family home, there’s a lot of people competing for it. Especially if
you buy it beneath the median, right? Beneath the average that people are
paying for homes in their area because again people want houses. At least people
that want to buy houses right? So number one is residential.
Number two is commercial. Commercial real estate is any kind of real estate that
you’re doing with some type of business purpose in mind.
For example, I’m just finishing a project on a convention center and it’s 16,000
square feet. It’s designed for 500 people at a time to come in, rent out and use
that space for holding meetings, conventions or really whatever purpose
that they want and I would tell you that commercial real estate tends to be a
little bit riskier for someone who’s the beginner because commercial real estate
usually means a higher price tag, which usually means a lot more money. Now, does
that mean a lot more work? No, it doesn’t. If I have to start off by helping
someone make money in real estate, I’m going to start in residential real estate
versus commercial. Another reason is because I might have
hundreds of people in an area looking for a new house, but only you might have
one or two or three businesses looking for to occupy a commercial space. So the
law of numbers, just has really stacked towards in residential. Now I do
commercial but I’m more careful and I’m more introspective and I crunch my
numbers to make sure that everything’s really lined up. The third kind of real
estate that I want to talk today is about industrial real estate. Now,
industrials when you go into like industrial parks, this is where you get
into warehouses and businesses that don’t really need that much of like a
businessy facade. They often to be manufacturing plants or storage spaces
for you know whatever kind of business are conducting. It’s still going to be
business related but industrial tends to get cheaper and less parking spaces and
bigger buildings because they’re warehousing things and they’re doing
something big inside this industrial area. Industrial can also be
like factories and it can be you know production facilities. Industrial, that’s
big like commercial is big and it’s very net specific and it’s very specialized.
So yeah I think that it’s really specific to a specific business where
real estate just happens to go along with it. I mean for just a moment, The
largest real estate holder in the world is who? Its McDonald’s and you have to
argue. Are they the world’s largest real estate company? or are they the world’s
largest fast-food company? You know real estate is just a part of their business
and so yeah, they’re powerhouse when it comes to like having some access to some
of the very best real estate on the planet, but what they’re doing is they’re
operating a very specific business. A very specific restaurant industry right?
Okay, the fourth type of real estate we’re going to talk about today is retail.
Okay, retail is the is real estate where you’ll obviously have businesses that
are opening to sell stuff. They’re designed for consumers to walk in and
people are buying something off of the shelf or they get a chance to experience
your service and so retail is a very very important
kind of real estate. Now, I personally don’t do anything with retail. I just
haven’t found a deal with numbers that get me up in the night excited. I haven’t
found anything that really kind of works for my personal appetite. I think
there’s a higher degree of risk that can be associated with it so I don’t own any
shopping strips or anything like that. I’ve got some commercial. I’ve got
otherwise residential and for that reason we get into the fifth difference
which is mixed-use. Mixed-use would just basically be like,
“oh someone’s living in a skyrise above.” They’re renting out retail space down
below. Mixed used when you actually have special zoning rights on a property to
actually do multiple different things with it.
It usually conveys greater possibility. You have different opportunities often
of what you can actually do with the land. So mixed-use is the fifth kind and
then the sixth and the final one is what we call land. You know, land for me is not
an investment because typically you’re buying it and that you’re just hoping
that it goes up in value. That is not my favorite kind of
investment. It’s not something that I really enjoy. I don’t actually own
personally and just see you’re not alone in any land. Because it doesn’t pay me. My
investments I really like for them to pay me and unless there’s a way for the
land to pay me, I’m really not interested. I’m not talking about buying land and
like leasing it to a farmer and then getting paid for them to like use the
acreage. In almost every scenario, when I meet people that have land, I’m telling
them, “sell your land and go put it into something that can actually pay you more
predictably a better ROI. Some people are just really attached to land. So those
are the six different types of real estate. Those are some of my feelings on
you know my personal views of whether I like to deal with them or not. You’re
always going to find me playing in the residential space because there’s a
massive group of people that need and want that and then if the commercial
deals right, I’m getting in if you want to know my favorite ways to invest in
real estate then hike over to my website, check out the link in the description
below and me and my team will show you how you and I can team up and we can get
cracking on some of the very best real estate that investing has to offer.

19 Comments

  • ariel castillo

    Hey kris, I'm currently 17 years old and am turning 18 in about 6 months. We owned a house in cali that was worth about 900k, we sold it and moved to Fl. And he bought 3 properties with that money and then he took a lease out on our house and then purchased a 4th house but once the lease was coming to an end he sold it and payed it off. Currently we own 3 houses which we dont owe anything on, once I turn 18 he is gonna put one of the houses under my name. I am aware of what a HUGE advantage this puts me in seeing that I basically own a house before the age of 20 which I will be extremely grateful for the rest of my life to my parents for. But what would you recommend my first step to be?? I'm educated a bit on the whole landlord thing since I've helped my dad out with it for many years since I was a small kid. But I'd like advice on what to do to begin and what to to in order to increase some passive income.

  • Geoff Southworth

    Land is a good way to invest for capital gains over the long term. Look to “main st” in any area, buy 8 miles out still on Main Street and wait for the development to follow. Very long term however you can make a killing if you are willing to wait 7-10 years. Possibly for generational wealth.

    Also, what about private lending? You don’t have to buy a property to create a cash flow.

  • Juanco_"C.E.O."

    Good content. But please stop it with the fake cuts, and zoom ins, it's very distracting and takes away from what you are trying to portray. 1 luv

  • Mark Pearce

    I have a question with a sandwich lease to own option, the 3 or 5 or 10% down you take which comes off at purchase, are the bank taking that as the down from the buyer? So we are basically just getting the new owner in the home while they finish up with the bank?

  • Gabriel Beverly

    Kris!! I’ve been reading your book which refers to access to all these free resources like flyers and stuff but I can’t find the website??

  • do u even

    Also with land you can grow specific trees for high end furniture, lease to solar companies, windmill companies, and maybe can find oil. My friends parents found oil on there land and now they're multimillionaires. Also there are a lot of rules counties have on what you can and cannot do with your land so make sure to check before you buy. Also make sure there are no taxes on the property that arn't paid bc that'll fall back on you once you buy it.

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