Not All Real Estate Investors Are The Same
Different Types of Real Estate Investors
It is unfair to say that you focus on serving real estate investors when there are so many different types of real estate investors.
And, each type has their own wants, desires, needs, language, jargon, methods for finding deals, methods of analyzing deals, short-term goals, long-term goals, etc.
Your methods to find different investor types can vary depending on the type… you’d find fix and flip investors differently than buy and hold real estate investors
Your methods to attract different investor types can vary depending on the type… fix and flip investors will be attracted to different types of classes, newsletter articles, podcast episodes, and different properties
And your method to get different investor types as clients can vary depending on the type… fix and flip investors will likely want you to provide slightly different services than their buy and hold brethren
We will be going over most of these in a lot more detail, but today I want to give you a brief overview of all the different types of real estate investors (I think I got them all, but it is possible I missed one or two).
15 Types of Real Estate Investors
There are 15 different types of real estate investors. So, here goes:
Buy and Hold - These real estate investors are looking to buy properties with the intention of holding them long-term. Typically, these investors will be renting out their properties for cash flow. Although, as I discuss when I talk about the Financial Independence Asset Allocation and Cash Flow Engine™ spreadsheet… there are properties you buy with the intention of cash flowing them forever into your financial independence and there are properties that you plan to ultimately sell for capital gains but might cash flow for a period of time in the meantime. These investors are typically looking to convert some down payment into a steady, growing stream of cash flow that they can ultimately use to achieve financial independence.
Fix and Flip - These real estate investors are looking to generate chunks of money now. They are looking to find properties they can buy—usually at a large discount—and usually that require fix up work—then do the work and immediately resell the property for a profit. Often they are buying and selling properties within 3-6 months… sometimes a little longer. Some fix and flip investors use this strategy to generate down payments to do more traditional buy and hold deals. Some use this strategy as job income to pay their personal expenses.
Those are two of the most common, but here are 13 additional. Some of the 13 are even more important for those that are serving real estate investors.
Buy, Rehab, Rent, Refi and Repeat (the BRRR or BRRRR strategy) - These types of real estate investors are a mix between the fix and flip investors and buy and hold real estate investors. They need a property they can buy at a discount and add value to (fix up) so they can leave as little money in the deal as possible. But, they want to ultimately keep the property and rent it… at least for a short period… before possibly selling it.