These are the four broad investment strategies in real estate. They’re visually depicted here as a linear spectrum. As you progress from left to the right on this spectrum, your risk and return are increasing. This is a simplification of the world, but it is conceptually and directionally correct. Below, we define and contextualize the four strategies and map them to target returns for each strategy below.

If you ask the average investor how someone can make money in real estate, they’ll more than likely respond with either cash flow or appreciation, but there are actually four ways for real estate investors to make money in any deal.

Many commercial real estate professionals refer to the core asset classes in commercial real estate as the “four basic food groups”: industrial, multifamily, office and retail.

There are two primary categories of real estate - residential and commercial. Residential is pretty straight forward; it’s the housing structures we live in. And on the face of it, commercial real estate is equally straight forward; it’s real estate used in commerce. Sounds simple, but commercial real estate is much broader than residential.