{"id":127330,"date":"2020-07-04T05:00:28","date_gmt":"2020-07-04T11:00:28","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=127330"},"modified":"2021-03-16T17:01:01","modified_gmt":"2021-03-16T23:01:01","slug":"stack-blueprint-scaling-quickly-real-estate","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/stack-blueprint-scaling-quickly-real-estate","title":{"rendered":"The Stack: The Perfect Blueprint for Scaling Quickly in Real Estate"},"content":{"rendered":"<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/g4ZNUqsxLT0\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><span data-mce-type=\"bookmark\" style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" class=\"mce_SELRES_start\">?<\/span><\/iframe><\/p>\n<p class=\"p1\"><span class=\"s1\">There was a study done that Harvard Business Review put out a few years ago. Basically the best way to continue moving forward on something is to facilitate small wins. <\/span><span class=\"s1\">It&#8217;s even better than a big win. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">It&#8217;s more important for continuing something to take on a lot of small wins. This is how our minds are wired: We want to get a lot of small wins.<\/span><\/p>\n<h2>The Importance of Small Victories<\/h2>\n<p class=\"p1\"><span class=\"s1\">Small multifamily properties are fairly easy to take down. <\/span><span class=\"s1\">Like if you\u2019re out hunting, they&#8217;re the rabbits that are everywhere. And you can do them. They don&#8217;t make a ton of money, you\u2019re not going to get rich off the rabbits or, you know, get fat off the rabbits. But they&#8217;re good to get that momentum going.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Same thing when Josh was doing BiggerPockets or when I was doing my first stuff; it&#8217;s good to get those little deals. One deal won&#8217;t make you rich, but at the same time, it kind of does. In other words, if you wouldn\u2019t have done that first deal, you would\u2019ve never gotten to where you are today. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">But you have to start there.<\/span><\/p>\n<p><em><strong>Related:<\/strong> <a href=\"https:\/\/www.biggerpockets.com\/blog\/2014-09-28-analyze-rental-properties\" target=\"_blank\" rel=\"noopener noreferrer\">The Ultimate Guide to Analyzing Rental Properties (+ Free PDF!)<\/a><\/em><\/p>\n<p class=\"p1\"><span class=\"s1\">A lot of people get scared about multifamily when they think 500 units, or 100 units, or even 50 units. <\/span><span class=\"s1\">Especially when I say, &#8220;Hey, if you&#8217;re making $100 per unit, you\u2019d only need 50 units to make $5,000 a month in profit if you&#8217;re making $100 per unit per month after all expenses.&#8221;<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And people are like, \u201cWell, 50? I can&#8217;t even buy one property. That&#8217;s so hard. How would I buy 50?\u201d So, I explain this concept called the stack.<\/span><\/p>\n<h2>What Is the stack?<\/h2>\n<p class=\"p1\"><span class=\"s1\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-115313 size-main-slider\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/09\/private-investment-702x336.jpg\" alt=\"savings\" width=\"702\" height=\"336\" title=\"\"><\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">The stack is like this. Level one, if all you did this year was bought a duplex, nothing else. You got a duplex and then you sat around for a year and just learned how to do it. Now I\u2019m not saying you have to start there. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">But here&#8217;s the logic.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Next year, a whole year later, you buy a fourplex. You\u2019ve already bought a duplex. You did the hard part. You started the train moving. The momentum is going. Then, you buy the fourplex, you figure out how that works.<br \/>\n<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">And then maybe a whole year later, you buy an eight-unit. Now you&#8217;re in the commercial world, right? And you learn how commercial lending works, but it\u2019s still not a big deal. <\/span><span class=\"s1\">If you handled a fourplex and a duplex, you can handle an eight-unit. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">The year after, you do a 16-unit. The year after that you do a 32-unit. And then, a year later, you do a 64-unit. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">After five years, you\u2019re at over 100 units now, and you scaled conservatively. You didn&#8217;t go crazy\u2014didn&#8217;t start like, \u201cI don&#8217;t even know what real estate is. Let&#8217;s go buy a 200-unit.\u201d<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"> That would be tough for most people. Unless you partner well, that&#8217;s really the only way you can jump levels of the stack\u2014by partnering with somebody who&#8217;s already gone through the stack.<\/span><\/p>\n<p><em><strong>Related:<\/strong> <a href=\"https:\/\/www.biggerpockets.com\/blog\/2016-07-06-multifamily-real-estate-value\" target=\"_blank\" rel=\"noopener noreferrer\">How to Calculate the Value of Multifamily Real Estate<\/a><\/em><\/p>\n<h2>How to Scale Quickly With Less Risk<\/h2>\n<p class=\"p1\"><span class=\"s1\">Using the stack, you scaled quickly but conservatively. And those two things seem diametrically opposed. But they&#8217;re not. You can scale quickly and conservatively because you just do it outside your zone of comfort but within your zone of ability. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Think of two concentric circles. The inside circle is your comfort zone, the outside circle is your ability zone. And then there&#8217;s your inability zone. You don&#8217;t want invest in your inability zone, because that&#8217;s where mistakes happen.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">But you also don&#8217;t want to live in your comfort zone forever, because that&#8217;s where you get stuck doing single-family deals all day long\u2014or all duplexes or triplexes\u2014and you never build up enough passive income to quit your job. So it&#8217;s that zone of where you&#8217;re outside your comfort zone but within your ability zone. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">When I look back on my life, I realize that&#8217;s what I did. That&#8217;s what the stack was.<\/span><\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/store\/wealth-magazine-one-year\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-123232 size-full\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2020\/03\/Blog-700x120-v2.jpg\" alt=\"Blog ad for Wealth magazine\" width=\"700\" height=\"120\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2020\/03\/Blog-700x120-v2.jpg 700w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2020\/03\/Blog-700x120-v2-300x51.jpg 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<p><em>What are your small wins?<\/em><\/p>\n<p><strong>Let us know in the comments below.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to the Harvard Business Review, the best way to continue moving forward on something is to facilitate small wins. Use this psychological principle to scale quickly yet conservatively as a real estate investor. Here&#8217;s how.<\/p>\n","protected":false},"author":710,"featured_media":117804,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4241],"tags":[],"class_list":["post-127330","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-business-management"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/127330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/710"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=127330"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/127330\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/117804"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=127330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=127330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=127330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}