3 Keys to Sustainably Scaling Your Real Estate Portfolio

3 Keys to Sustainably Scaling Your Real Estate Portfolio

3 min read
Sterling White

Sterling White is a multifamily investor, specializing in value-add apartments in Indianapolis and other Midwestern markets. With just under a decade of experience in the real estate industry, Sterling was involved with the management of over $10MM in capital, which is deployed across a $18.9MM real estate portfolio made up of multifamily apartments. Through the company he founded, Sonder Investment Group, he owns just under 400 units.

Experience
Sterling is a seasoned real estate investor, philanthropist, speaker, host, mentor, and former world record attemptee, who was born and raised in Indianapolis. He is the author of the renowned book From Zero to 400 Units and the host of a phenomenal podcast, which hit the No. 1 spot on The Real Estate Experience Podcast‘s list of best shows in the investing category.

Living and breathing real estate since 2009, Sterling currently owns multiple businesses related to real estate, including Sterling White Enterprises, Sonder Investment Group, and other investment partnerships. Throughout the span of a decade, he has contributed to helping others become successful in the real estate industry. In addition, he has been directly involved with both buying and selling over 100 single family homes.

Sterling’s primary specialities include sales, marketing, crowdfunding, buy and hold investing, investment properties, and many more.

He was featured on the BiggerPockets Podcast episode #308 and has been contributing content to BiggerPockets since 2014, with over 200 posts on topics ranging from single family investing and apartment investing to mindset and scaling a business online. He has been featured on multiple other podcasts, too.

When he isn’t immersed in the real world, Sterling likes reading motivational books, including Maverick Mindset by Doug Hall, As a Man Thinketh by James Allen, and Sell or Be Sold by Grant Cardone.

As a thrill-seeker with an evident fear of heights, he somehow managed to jump off of a 65-foot cliff into deep water without flinching. (Okay, maybe a little bit…) Sterling is also an avid kale-eating traveller, but nothing is more important to him than family. His unusual habit is bird-watching, which he discovered he truly enjoyed during an Ornithology class from his college days.

Education
Sterling attended the University of Indianapolis.

Follow
LinkedIn
Facebook
Instagram @sterlingwhiteofficial
YouTube
SterlingWhite.info

Read More

Join BiggerPockets (for free!) and get access to real estate investing tips, market updates, and exclusive email content.

Sign in Already a member?

How do you realistically increase the number of rental properties you hold?

Scaling your income property portfolio is crucial for ensuring continuity in cash flow, achieving financial freedom, accommodating increasing expenses, and achieving your bigger goals.

How Many Rental Homes Do I Need?

If you’ve owned a few rental properties or have even just done your homework, you already know that you need diversification in your portfolio to make sure money keeps coming in. This will probably include both diversification in number of units and geography. Then, if something hampers the performance of a couple of your rentals, you should still be ahead of the game.

It is also important to recognize that expenses will typically keep on rising due to inflation. Taxes, food, travel, healthcare, and your own housing costs will probably keep growing for the rest of your life. Then, make sure that you account for the fact that once you achieve your goals and dream lifestyle, you’ll no doubt be setting even higher goals to achieve.

owner-financing

How many rentals you need is really an individual equation. It depends on where you want to be financially. Maybe you only need 10 to reach your financial freedom number. For others, it may be 100 or 10,000 units.

Remember that over a few decades, the chances are that you will cycle through a few properties, too. Aging ones may be replaced. And some may be switched out for more profitable options in new markets. That means ongoing transactional activity in addition to management.

Related: BP Podcast 164: Scaling from 0 to 400+ Deals Through Real Estate Entrepreneurship with Steve Mills

The Challenges of Scaling a Rental Property Portfolio

Profitably and soundly scaling a rental portfolio takes work and has its challenges. This specifically includes rehabbing, finding property deals, navigating the distance between properties, and maintaining a good level of service and free time during the process. You want to actually be able to enjoy the rewards of investing in real estate. If you are not careful, you’ll create more than a full-time job for yourself — a job where you may work late nights, weekends, and holidays.

The 3 Keys to Scaling Wisely

There are three keys to being able to realistically scale your rentals:

  1. System: procedures, processes, methods, or courses of action designed to achieve a specific results
  2. Team: property managers, leasing agents, real estate agents
  3. Cash

Try to go too fast, and you’ll burn out. Take shortcuts, and it won’t be sustainable. If you aren’t efficient at every step in the process, you will suffer subpar yields, you’ll miss your goal deadlines, or you simply won’t close on enough properties. The truth is that you can scale very quickly. The key is doing it in a sustainable way so that you can afford to hang onto your gains and cash flow lifelines. This means having a good framework, proficient team members so everything does not rely on you everyday, and using a sound mix of your own cash and financial leverage from others. Maybe you have one team member who solely focuses on finding and purchasing deals, while another team member coordinates the closing with the title company of those deals. 

human-side-real-estate

Related: How to Scale Your Wholesaling Business to 120+ Properties Per Year

Fortunately, there are now more efficient ways to scale rentals, especially for busy professionals who know they need the passive income and yields rentals offer, but either can’t skip the paychecks in the short-term or don’t want to leave the careers that they care about. For example, new technology, better access to data, and more efficient cloud-based systems have been attracting more sophisticated investors to turnkey rentals and real estate crowdfunding.

So break down how many rentals you think you’ll need, and do the math on how many you need to pick up each year (or month) to hit your financial and retirement goals.

How are you planning on scaling your real estate business?

Let me know your thoughts with a comment!