Each of these strategies has its own set of benefits, risks, and requirements in terms of time, capital, and expertise. Investors often choose a strategy based on their financial goals, available resources, risk tolerance, and the amount of time they can dedicate to their real estate ventures.
Based on the evaluation of various real estate investment strategies against key investment GOALS, we've arrived at a definitive ranking that showcases the effectiveness and potential of each strategy.
Leading the pack is the Co-Living strategy, scoring an impressive 71/80 points, which underscores its exceptional ability to meet a wide array of investment objectives, from generating passive income to building wealth and fostering community.
Following closely in second place is the Buy and Hold strategy, with 67/80 points, highlighting its strength in long-term wealth accumulation and the generation of steady income, making it a cornerstone for those looking to secure their financial future.
The Short-Term Rentals (STR) strategy takes the third spot with 53/80 points, reflecting its dynamic potential to capitalize on high-demand locations and provide flexible income opportunities, though with a higher active management requirement.
House Hacking comes in fourth, scoring 52/80 points, offering a practical entry into real estate investment by reducing living expenses and leveraging owner-occupied properties for rental income, demonstrating a balanced approach for newcomers. (Fannie May released a PRODUCT on November 20th 2023, that "allows 5% down payments for owner-occupied 2-, 3-, and 4-unit (multifamily) homes")
In the fifth position, REITs, with 50/80 points, stand out for their accessibility and the diversification they bring to an investment portfolio, allowing investors to tap into real estate markets with liquidity and ease.
House Flipping is ranked sixth, with 35/80 points, recognized for its potential for quick returns through property renovation and resale, though it requires significant market knowledge and risk tolerance.
Wholesaling secures the final spot with 20/80 points, illustrating its role as a strategy focused on short-term gains through contract assignments, suitable for those looking to enter the real estate market with minimal capital outlay.
This ranking not only highlights the diverse avenues available for real estate investment but also solidifies the importance of aligning one's investment strategy with personal goals, resources, and risk appetite.
Co-Living, leading the list, exemplifies a modern approach to real estate that balances financial returns with the growing desire for community and connection, making it a compelling option for today's investors.
"I've had the privilege of collaborating with Brian at HobKnob since 2018, and it's been an incredibly rewarding journey. Under Brian's expert guidance, we've ventured into two highly successful BRRRR property investments and they are being utilized as CoLiving Rentals. Thanks to his strategy of Renting by the Room, we executed refinances that allowed us to recoup our initial investments entirely, enabling us to generate consistent higher returns with no further capital tied up in the properties. Brian's wealth of experience in raising funds and establishing thriving ventures has been instrumental in our collective success."
Robert Holbrook - 2 Coliving Properties w/ a total of 17 units
"Brian was my first introduction to multi-family realestate investing. He invited me to multiple seminars and taught me the in’s and out’s to understanding how to identify potential properties and most importantly how to evaluate a positive ROI. He’s extremely knowledgeable when comes to real estate and one of the few you can trust. We are partnered on one property an I receive a consistent 22.5% cash on cash return!"
Todd Armstrong - 1 Coliving Property w/ a total of 5 units
"My wife and I have been investing with Brian (Our son) since 2017. We have a total of 26 CoLiving units with him and he has been consistent and on time with our monthly distributions. Although we are his parents, he has never taken advantage of that and has always been very professional. We will keep investing with Brian and his team at HobKnob until our last days on this earth."
David & Anayeli Douglas - 3 Coliving Properties w/ a total of 26 units
Co-Living (Rent-by-the-Room)
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Generating Passive Income: 10
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Achieving Retirement Goals: 9
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Building Wealth: 10
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Legacy Building: 9
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Tax Benefits:
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Hedge Against Inflation: 9
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Diversifying Investment Portfolio: 8
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Financial Independence: 8
Total Score: 71/80
Buy and Hold
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Generating Passive Income: 9
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Achieving Retirement Goals: 9
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Building Wealth: 10
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Legacy Building: 8
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Tax Benefits: 9
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Hedge Against Inflation: 9
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Diversifying Investment Portfolio: 7
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Financial Independence: 6
Total Score: 67/80
Short-Term Rentals (STRs)
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Generating Passive Income: 4
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Achieving Retirement Goals: 7
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Building Wealth: 7
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Legacy Building: 6
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Tax Benefits: 6
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Hedge Against Inflation: 8
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Diversifying Investment Portfolio: 6
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Financial Independence: 9
Total Score: 53/80
House Hacking
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Generating Passive Income: 7
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Achieving Retirement Goals: 6
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Building Wealth: 7
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Legacy Building: 5
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Tax Benefits: 7
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Hedge Against Inflation: 7
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Diversifying Investment Portfolio: 5
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Financial Independence: 8
Total Score: 52/80
Real Estate Investment Trusts (REITs)
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Generating Passive Income: 9
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Achieving Retirement Goals: 8
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Building Wealth: 7
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Legacy Building: 4
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Tax Benefits: 2
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Hedge Against Inflation: 7
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Diversifying Investment Portfolio: 10
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Financial Independence: 3
Total Score: 50/80
House Flipping
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Generating Passive Income: 2
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Achieving Retirement Goals: 5
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Building Wealth: 7
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Legacy Building: 2
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Tax Benefits: 3
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Hedge Against Inflation: 3
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Diversifying Investment Portfolio: 5
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Financial Independence: 8
Total Score: 35/80
Wholesaling
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Generating Passive Income: 1
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Achieving Retirement Goals: 4
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Building Wealth: 4
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Legacy Building: 1
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Tax Benefits: 1
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Hedge Against Inflation: 1
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Diversifying Investment Portfolio: 3
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Financial Independence: 5
Total Score: 20/80