How to Scale Your Real Estate Portfolio
Andrew Carnegie is quoted for saying “90% of all millionaires become so through owning real estate”. I 100% agree with this statement! The question becomes “how”? I talked with a guy today who currently owns 6 real estate units and he wants to get to 26. Why? Because in his very words he wants “one problem, with one address, with 26 doors that pay him.” His question was centered around how to get from 6 to 26. I am going to break down exactly how to do this.
It won’t happen because of your current portfolio. There isn’t an easy way to go from 6 units to 26 using the 6 units. Unless you have a significant equity position to use as capital to get into more units, you must realize the real estate won’t get you into more real estate right now. You have only 2 options: 1. Hope for appreciation over time. This will take time and luck. You have no control over the appreciation. 2. Save the cash flow. This is more certain but it will take time still. You’ve got to build up a down payment from the current cash flow. Realize there is a very slim chance that you’ll be able to go from 6 units to 26 in any reasonably soon timeline.
Make more money. You will need to make more money. How can you increase your income? You will need something with significant margin to make this happen. Push the income up and fast. I know that isn’t what you may want to hear and I know it isn’t “passive” but it’s the truth. Those who win the biggest in real estate won big in business first. The sooner you can accept this and attack it the better off you will be. This doesn’t need to be a job, career, or business that you even like. It must have margin, volume, and be ethical. That’s literally it.
Save everything. Your increases cannot go to your standard of living. It must all go towards savings for your next deal. Watch your current properties like a hawk so you can maximize their income and appreciation as well and SAVE EVERYTHING. Don’t invest it, don’t put it in the stock market and do not for any reason put it in a retirement plan. Setup a sacred account and put all of your money there.
Learn. Owning large multi-family is not the same as owning a 4 plex or a small rental. You must think and operate like a business owner. If you do not have your systems and people in place, your new multi-family apartments will eat you alive. Read books like The Millionaire Real Estate Investor and The Intelligent Investor to begin thinking and operating on the right basis. Now practice these new skills on your current real estate. How do you books look? What are your systems like for management? What about your tenant screening? What are you doing to add value to the property and drive rents up? These are all things to consider. The next step will be to hire property managers. Why? Because you’ll need them on your bigger deals and if you can’t manage your managers on 4 units you will not be able to do it on 26.
This is advice you won’t get from your realtor, your lender, or even your property manager. This is advice you will only get from your Wealth Coach. You need a plan in place to help you navigate from here to there and an objective 3rd party to act as a gatekeeper to guard the integrity of your plan. Why? Because you deserve to own your potential and the only way you can do that is to stop trading time for money. To stop trading time for money you must own assets. To own assets you must have a plan. To have a good plan you need a Wealth Coach. It’s as simple as that. Right now, I’m offering a free webinar to walk you through this process. It will help you tie the steps together to stop trading time for money and own your potential. Click here to access it!
Own Your Potential,
Jerry Fetta helps his clients make money, keep it, and multiply it.
He believes everyone should own their potential. He believes you were not created to spend 40+ hours per week serving the 40-year-to-life sentence trading your precious time for money just to live in mediocrity.
However, the truth is that time and money must be exchanged. It just doesn’t need to be you making the exchange.
Jerry helps his clients create wealth that exchanges time and money on their behalf.
His clients see a 30% increase in income, a guaranteed increase in savings rate, and 8-12% fixed annual returns on their assets in the 1st 90 days of working with him.
To get started, go to www.WealthDynamX.com/potential