Real estate investors:

Understand your strategy and the trade-offs that come with it.

Here are the four main strategies that investors use.

Core - buy an existing, stabilized property, change very little, and sell it again.

The main focus of this strategy is to buy quality assets in ideal locations.

Offers the lowest returns but your risk profile decreases as well.

Core Plus - buy a property, make minor upgrades to drive up value slightly.

Again, the focus is to buy quality assets but they could be out of date or in need of cosmetic updates.

***This is where I focus most of my attention***

Value-Add - acquire an existing property, renovate or greatly improve it, and sell/refi

These properties have in-place cash flow, but seek to increase that cash flow over time by making improvements to or repositioning the property

This is capital intensive.

Opportunistic - develop, or re-develop a property then sell/refi

Redevelopment is the replacement or repurposing of existing improvements on an already developed site.

Highest return but also has the highest risk associated with this strategy.

All strategies are built off of the main four mentioned above.

Variations can be used and no strategy offers "the best" returns since it depends on your investment goals and how your current portfolio is structured.