Investment Options
Accessibility | |||
Accessibility | Fix and Flip | Direct Ownership | Land Contract (LC) |
---|---|---|---|
Time Commitment for investment | 4 Months | 1 Month | 1 Month |
Initial investment cost | High | Variable | Variable |
Possibility to use financing | Yes | Yes | Not Directly |
Suited for long-term investment | Yes | Yes | Yes |
Growth Potential | |||
Growth Potential | Fix and Flip | Direct Ownership | Land Contract (LC) |
Opportunity for value appreciation | High | Moderate to High | Low |
Immediate cash flow potential | Post-refurbishment | Immediate | Immediate |
Investment diversification potential | Low to Moderate | Moderate to High | Moderate |
Scalability potential | Moderate to High | Moderate | High |
Typical exit strategy | Retail buyers | Investors / Retail buyers | Investors |
Asset Management | |||
Asset Management | Fix and Flip | Direct Ownership | Land Contract (LC) |
Ownership of physical property | Yes | Yes | No |
May inherit pre-existing lease terms | No | Yes | Yes |
Requires comprehensive rehabilitation | Yes | No | No |
Involves active property management | Yes | Yes | No |
Need for marketing and tenant search | Yes | Yes | No |
Risk Management | |||
Risk Management | Fix and Flip | Direct Ownership | Land Contract (LC) |
Control over property | Full | Full | Limited |
Exposure to default risk | Yes | Yes | Yes |
Legal / foreclosure process duration | Approx. 1 Month | Approx. 1 Month | Approx. 1 Month |
Investment Considerations | |||
Investment Considerations | Fix and Flip | Direct Ownership | Land Contract (LC) |
Characterized as a passive investment | Varies | Generally Yes | Yes |
Potential for equity growth | Yes | Yes | No |
Possibility of >10% cash on cash return | Possible | Possible | Less Likely |
Potential for >10% annual overall return | Yes | Yes | Yes |
Property is considered an intangible asset | No | No | Yes |
Access to rental or income history | No | Yes | Yes |
Expenses & Considerations | |||
Expenses & Considerations | Fix and Flip | Direct Ownership | Land Contract (LC) |
Ongoing maintenance costs | Yes | Yes | No |
Risk of vacancy costs | Yes | No | No |
Responsibility for property taxes | Yes | Yes | No |
Insurance obligations | Yes | Yes | No |
Acts as lender in the transaction | No | No | Yes |
Accrues interest | Not Directly | Not Directly | Yes |
Presence of a maturity date | No | No | Yes |
Market Environment Affects | |||
Market Environment Affects | Fix and Flip | Direct Ownership | Land Contract (LC) |
Regulatory and legal complexity | High | Moderate | High |
Market flexibility | Moderate | High | Low |
Environmental and social impact | Variable | Variable | Low |
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