Hello, my friends and welcome to another episode of Ask Marco where I answer your investing related questions.

Today's question comes from Cornelius and he says, hello Marco. My name is Cornelius excellent podcast. I'm currently just dissecting real estate investment tips and information in an effort to someday soon begin my investing journey. I've been listening to your podcast and have found it to be extremely informative and helpful. Well, thank you Cornelius.

In episode two zero five you were mentioning the different types of real estate investment strategies. My question is, is there a difference between buy and hold and buy and hold turnkey properties? Thanks for all your insight, Cornelius.





Thanks for the question. I will give you a a good but broad answer to this question because I'm actually thinking about doing a full episode on the different types of real estate investing strategies, which we'll go into more detail than what I'll cover here today.

But it also encompasses many other types of quote unquote strategies because some people confuse strategies with tactics and sometimes they confuse strategies with things that are really not investing, which I'll explain here in a minute. So generally speaking, there are two broad camps, if you will. There's the active and the passive side, and I've titled this podcast passive real estate investing because we focus on buy and hold strategies to create wealth. So the way to look at this is like having two buckets, the active strategies, if you will, our business strategies with emphasis on the word business. The passive side of this is the wealth building strategies with emphasis on the word wealth building. So here's what that looks like on the active side of real estate investing. Those strategies are typically your fix and flip. You're fixing hold and you're wholesaling. So what those mean are essentially fix and flip.

That is a business. You are in the business of finding properties that need work, doing those repairs, getting involved, in other words, rolling up your sleeves and you're doing the work where you're managing people that will be doing the work and then ultimately reselling them for a profit. In other words, you're buying low and selling high. That's the whole idea of buying, fixing and flipping property. But that's a business activity. It's not exactly investing because you're not generating cashflow or streams of cash. You're building chunks of cash. And there's nothing wrong with that if you put that chunk of cash to work, but that's a fix and flip business. Now, if you are doing that and you're buying, fixing, and holding, well now you're converting an active activity, a business strategy, into a passive investment, which is a wealth building strategy. And there's nothing wrong with that.

Many people do that. If you've got the ambition, the knowledge, the understanding, the time, the resources to do that and get involved on the active side of it and turn it into passive investments. Great. Uh, the goal there is to build additional equity because you're forcing equity and that's what you know the whole buy, fix and hold process is all about. So you've got buy, fix and flip, buy, fix and hold. Now the third category under the business strategy side of it, which is the active real estate investing is wholesaling. And this again is a business and this is where you go out and you're finding good deals on investment properties or for any property for that matter. And then you're reselling that property for a quick profit and you're going to put a markup on it and you're going to sell it. Technically speaking, you're actually not selling the property, you're selling the contract on the property.

So you will often lock up a property under contract, Mark it up and then sell it to another investor. You're making a small profit and you're moving that paper over to the other person and they take it over from there,