What type of investor are you?

It’s a Thursday afternoon, I just got out of the office, and I’m zipping through Houston’s traffic to get to the Marriott Hotel for a real estate investment seminar. I’ve been looking forward to this seminar for a couple of weeks since I’ve pretty much tour the majority of Houston’s major investment club meeting. This seminar was from an investment club that’s new to me. After fighting through the traffic and parking, I was finally sitting in the room and ready to soak in the information.

The speaker was well dress in his late 40s/ early 50s and was working the room very well. As I listen to him talk about the different techniques that investors can use to get leads, I started to wonder who he's talking to. I considered myself an investor, but definitely not the type of investor he's trying to market to, at least at this moment in my real estate career. However, I continued to listen and eventually left with more questions than I came with...

 It dawned on me the next day as I was driving to the office, that the speaker was targeting a specific group of investor. As I see it, there’s three type of real estate investor; passive, semi-active and active.

If you’re a passive investor, you want a return on your investment in the form of interest rate on secure loan or you might invest in REIT by purchasing their stocks. Passive investors are not interested in providing sweat equity (efforts), but will provide financial equity in the deal.

If you’re a semi-active investor, you have a full time job and you’re just looking around once in a while for a good deal. You might be looking to flip a home that doesn’t require a lot of repairs (less than $10,000), or you’re long term buy & hold investor working with a property management company that will look after your properties.  Semi-active investor primary source of income is not acquired through their real estate activites. Semi-active investors are willing to provide some sweat equity in the deal. You rely on the wholesaler, real estate agent, REIA clubs, etc... to bring you the deals. Semi-active investor does very little to zero marketing to get leads.

If you're a active investor, you are the wholesaler, full time house flipper, real estate mentors, most real estate brokers/agents, hard- money lender, etc… Basically, your primary source of income is through real estate activities and you are willing to provide 100% sweat equity in the deal. You are willing to invest heavily in marketing in the hope of finding a deal that will net you the big bucks because you know that leads = $$$!

Know what type of investor you are! It'll help you chase after the right kind of deals.