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If you’re just starting out in the real estate investing arena, you may have noticed that there seems to be two camps that real estate investors belong to - the wholesaler, and the buy and hold investor.

Depending on what camp an investor falls into, the answer may be vastly different as to what is the best way to invest in real estate.

What’s Your Plan?

What it really boils down to is this - what do you hope to achieve with your real estate investing?

Once you are able to answer that question for yourself, your exit strategy should be very clear.

For instance, if you’re objective is to rake in cash fairly quickly, then wholesaling is the path that will get you there the quickest. However, if you’re looking to create wealth, the buy and hold strategy would be the smart move.

Some Factors to Consider

1. Your local market

2. How long are houses staying on the market

3. Number of foreclosures in the area you are looking to buy.

4. What tax bracket do you fall into?

5. Do you have a sustainable, local economy?

Taking a hard look at what this data is telling you will make you a more educated investor.

Investing in Today’s Market

Given the current climate of our economy, and if security is what’s most important to you, the buy and hold strategy is your ace in the hole. As you probably know, the number of foreclosures are through the roof all over the country. As a result, homeowners are being forced out of their homes at an alarming rate. To me, this screams buy and hold.

Bottom line is, defaulted homeowner’s without a place to live are pretty much forced to look for a housing alternative, and that housing alternative, in most cases, is renting.

The Best of Both World’s

There is no hard and fast rule that says you have to do one or the other - you really can have your cake and eat it too. Think of it this way, implement the buy and hold strategy to build your portfolio and to create long term wealth, and wholesaling deals to make quick profits and needed capital to fund your deals.

Hey, it doesn’t get any better than that!

What are your opinions about this? Please share your comments below.