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.