Find a Need in Real Estate and Fill It!
By Lou Gimbutis, Chief Homebuyer, Property Solutions, LLC
Real Estate Investing can seem like a singular, all-encompassing category, but it is much better understood when broken down into its niches, or sub-areas. From rehab and re-sell (commonly thought of as “the only strategy”), to mobile homes, commercial real estate, raw land . . . the list could easily outstrip my available work count.
I know a gentleman who has made an extremely profitable business focusing on one tiny niche within residential real estate- shared housing. The concept here is simple- you buy pizza by the pie, and sell it by the slice. He takes larger homes, and rents out bedrooms with access to common areas like living rooms and bathrooms. Those common areas are cleaned weekly, and he includes cable television and utilities in each occupants monthly payment.
Folks, the need for affordable housing in this country is growing faster than our ability to fill it. The government tried it’s hand, and has what to show for it’s efforts- bullet-riddled government housing projects, or rent-control states like California where there is a massive shortgage of available rental property due to this egregious violation of the law of supply and demand?
My friend here provides these folks with safe, clean living conditions, for an amount that would normally have them living in an unsafe part of town or a run down house. And look at the math: In this example, let’s say a 4 bedroom house rents for $1200 per month. That’s a lot of money for a single person to come up with, and this trend is particularly targeting baby boomers who are now reaching retirement age en masse. Add $200 for cleaning, $300 for utilities and cable, and his additional expenses are $500. Let’s say he rents each room out for $500 (and where are you going to find a safe, clean living space inclusive of utilities, cable, and cleaning for that?). That’s $2,000 per month rent, minus $500 in additional expenses, netting him $1500 per month, or $300 over what the house would have rented for as a 4 bedroom (a 25% bottom-line increase). Can you say win-win? This is just one example, working remarkably for one brilliant gentleman I know.
Lou Gimbutis, owner of Property Solutions, LLC, where We Buy Houses, We Buy Mobile Homes, and We Stop Foreclosure, has been buying and selling houses full-time since 2004, first in Michigan, then after moving to NC in 2007. He serves as Director of Education for the Metrolina Real Estate Investor’s Association.