How to Scale Your Real Estate Portfolio
Are you planning to add more properties to your real estate portfolio? Looking for ways to scale? Why just stop at one or two, right? Well, once you purchase your first income property and go through the trenches once, every next property purchase should be easier to execute in terms of handling paperwork and different stages of the whole process. However, scaling a portfolio might not be as easy in practice as it is in theory. After all, you’re going to need a good plan and financing support in order to go above 5, 6, 7, or even 10 properties. Here are a few tips to keep in mind once you decide to move from landlord to investor.
#1 Plan Strategically
Before you can make any moves, you need to have a proper plan laid out in front of you. I’m talking about both a plan for where you want to be 5 years from now and a plan that’s much closer to the present day. It’s always good to look at both perspectives - what needs to be done now and what will have to be done later in the future. It is critical that you plan every step of the way, including your investing strategy and expectations. However, keep in mind that you won’t always stick too precisely to your goal since markets and strategies change over time. Always leave some room for flexibility and creative shortcuts and solutions for when things get rough.
#2 Set Clear Goals
The next step that goes along with planning is to set clear goals as to what exactly you’re aiming for. Keeping an eye on your goals will help you stay on track, determine priorities, and continue putting the focus where it needs to be put. The best way to go about setting goals is to follow the SMART technique that includes answering the following questions:
Specific - what exactly are you looking to accomplish?
Measurable - what metrics are you going to follow in order to hit the goal?
Achievable - how important is this goal and how realistic is it?
Relevant - does this goal make sense in relation to your overall plan?
Time-bound - what is the deadline for hitting this goal?
3. Set Up Automation Systems
Achieving big goals sometimes requires doing multiple things at once. Even though this may seem impossible, we are lucky enough to have the technology that allows us to be in multiple places at the same time. That is why it is important to set up automation wherever possible on your path to hitting your goals. This can make a huge difference in your time management strategy and allow you to scale your business beyond your own capabilities.
4. Leverage Other People’s Money
If you’re planning to use traditional financing all the time, don’t expect to get very far in investing. The reason is simple - you can only go so far with a limited amount of resources. However, if you open your eyes to more creative solutions, you are likely going to find it easier to secure financing for your properties without using your own money.
5. Build an Executive Team
Last but not least, you will have to build your own team. I’ve said this many times and I’ll say it again. You cannot do everything yourself. You can only wear so many hats until you start noticing that certain areas in your business are lacking attention. The more you scale your portfolio, the faster you’ll get to the point where you can’t handle it all on your own. That’s when you’ll need the help from finance professionals, realtors, tradespeople, and wholesalers, all of whom could make a great team for your business.