QOTW: What are/ were your first steps to scaling your business?
Alicia MarksPro Member
Fort Worth, TX · Member since 2020 · 1k+ posts · 2k+ votesQOTW: What are/ were your first steps to scaling your business?
Most Popular Reply
Scott TrenchPro Member
Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes"Scaling" for me is in the context of going from 1 to 5 properties (13 units). Some investors on this site will have different definitions of scaling.
For me, I'd say that the biggest thing about scaling is that it's a process, not an event.
Components of this process have included:
- My personal financial situation
- The value of my time (DIY vs Property Management)
Personal Finances:
As a real estate investor, my personal financial situation is paramount to my success. When I bought my first property, I was saving ~$1,500 per month. After that house-hack, my savings rate increased to $2,000 per month. Then $2,500, then $3,000. In fits, starts, and in some periods a "two steps forward one step backward" process, my monthly accumulation of cash has on average increased consistently for the past 8 years. This has allowed me to continuously invest in real estate, and stocks, as well as build and maintain a very conservative cash position in my personal life and business.
This is a huge component of scale. Every month sees, on average, an acceleration in my rate of cash accumulation. I think that this is the most important part of scaling for my small rental property business.
The Value of My Time:
When I got started in real estate, my time was worth $25 per hour. I made $50,000 per year, and worked 40 hour weeks. That comes to $25 per hour, before tax.
It absolutely made sense to paint my own walls, install my own blinds, complete handyman work and basic plumbing, do the landscaping, do my own taxes, and self-manage my properties. But, that certainly does not scale.
Over time, and with each passing month, on average, the value of my time has increased. From $25 per hour, to $50 per hour, to $100 per hour, and now well beyond that.
It absolutely no longer makes sense to paint my own walls, install my own blinds, complete handyman work and basic plumbing, do the landscaping, do my own taxes, and self-manage my properties. I hire that out now, and it allows me to scale.
If I had hired this stuff out at first, I would have been negatively arbitraging the value of my time. If I were to do this stuff now, I'd be negatively arbitraging the value of my time. This concept is critical, as new investors probably should not hire out many items, and instead should do that themselves.
Understand the value of your time, and use it to inform decisions about how you deploy it. Doing things that don't scale today may be exactly what you need to build your business over time, and will help you increase the value of your time until you hit inflection points where it makes sense to begin hiring others.
64 Replies
- 4yScott TrenchPro MemberRental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
"Scaling" for me is in the context of going from 1 to 5 properties (13 units). Some investors on this site will have different definitions of scaling.
For me, I'd say that the biggest thing about scaling is that it's a process, not an event.
Components of this process have included:
- My personal financial situation
- The value of my time (DIY vs Property Management)
Personal Finances:
As a real estate investor, my personal financial situation is paramount to my success. When I bought my first property, I was saving ~$1,500 per month. After that house-hack, my savings rate increased to $2,000 per month. Then $2,500, then $3,000. In fits, starts, and in some periods a "two steps forward one step backward" process, my monthly accumulation of cash has on average increased consistently for the past 8 years. This has allowed me to continuously invest in real estate, and stocks, as well as build and maintain a very conservative cash position in my personal life and business.
This is a huge component of scale. Every month sees, on average, an acceleration in my rate of cash accumulation. I think that this is the most important part of scaling for my small rental property business.
The Value of My Time:
When I got started in real estate, my time was worth $25 per hour. I made $50,000 per year, and worked 40 hour weeks. That comes to $25 per hour, before tax.
It absolutely made sense to paint my own walls, install my own blinds, complete handyman work and basic plumbing, do the landscaping, do my own taxes, and self-manage my properties. But, that certainly does not scale.
Over time, and with each passing month, on average, the value of my time has increased. From $25 per hour, to $50 per hour, to $100 per hour, and now well beyond that.
It absolutely no longer makes sense to paint my own walls, install my own blinds, complete handyman work and basic plumbing, do the landscaping, do my own taxes, and self-manage my properties. I hire that out now, and it allows me to scale.
If I had hired this stuff out at first, I would have been negatively arbitraging the value of my time. If I were to do this stuff now, I'd be negatively arbitraging the value of my time. This concept is critical, as new investors probably should not hire out many items, and instead should do that themselves.
Understand the value of your time, and use it to inform decisions about how you deploy it. Doing things that don't scale today may be exactly what you need to build your business over time, and will help you increase the value of your time until you hit inflection points where it makes sense to begin hiring others.
- Lender · Texas; Arizona · Member since 2019 · 276 posts · 282 votes4y
The first person you want to fire is yourself. You should look at every process in you business and apply this: Automate, Delegate, or Delete. You want to keep your time open for handling big items and growth. When starting off you network to find partners to help you get started. When scaling you network to find people who will work for you. Its hard to find individuals that do entrepreneurial work, but thats what you are looking for.
- 4yWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
Hello @Alicia Marks
Here are the top five ways to scale your real estate investment business.
1. Focus on a niche.
2. Create a brain trust.
3. Delegate.
4. Measure.
5. Standardize.
Scaling a business is about building all those things that can’t be seen from the outside. These processes though will allow you to grow your real estate business faster than you could have previously imagined, and without working harder to do so. Scaling is the foundation for which growth will be built on top of. Just as no house can be built without a foundation, no great business can be either.
Please read this blog for detailed information on above mentioned top five ways https://www.kiavi.com/blog/sca...All the Best!
NETWORTH BUILDERS5237 Reviews - Real Estate Agent · Mesa, AZ · Member since 2020 · 46 posts · 76 votes4y
For me, as a regular real estate agent, scaling means getting rid of lead generation activities that are taking too much time and focusing on lead generating activities that produce the most reward. I'm also spending time automating my systems within my CRM and consolidating all data into one system. This is an ongoing project I've been working on for several years. I also automated several processes within my business while actually reducing my costs by over 70%. Even though that cost was not a big deal, being able to see everything in one place, from all deals in the pipeline all the way through closing and even beyond, has been a big benefit. I'm also scaling back my outgoing marketing costs and focusing on personal relationships that have been beneficial. Lastly, I'm working on a lead generation system so that I can sell most of my inbound leads for a referral fee rather than trying to work them myself. That will allow me to scale beyond what I can do myself since I have 6-10 active listings and generally 5-10 active buyers at any given time. That's basically my limit so the only way to continue scaling is to sell the leads I don't have time for.
- Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes4y
Always kept my day job. It provides perspective, leads, training, insurance, and is grounding.
Learn the expensive lessons first: legal, title, construction, and failures.
Measure what you do, how much time it takes, plan in writing goals for 1 year 5 year 10 year. Every year learn a new major skill: accounting or whatever is your weakness. Don't waste your life on TV. Love big. Share your kindness every day with your family, those you work with, and the shiney newbie face who asks. Money comes and goes but the people you love will be there always.
I started with single family which I love and jumped to multifamily commercial then medical office. The principles are the same just add three then six more zeros.
Maintain your own CRM - I bought Goldmine a century ago and many companies I worked for paid for all new gadget CRM but I kept my list my own.
Data analytics is fabulous but does not accommodate all locations. If there are drug dealers out front, a geo disaster like fire and drought ahead, or something that smells dead you need boots on ground.
Don't pay for a class that is available for free. Don't get into partnerships with your inlaws or someone you do not intend to marry. Don't get into a partnership where you are not the GENERAL 51% owner.
- Attorney · Durham, NH · Member since 2019 · 292 posts · 126 votes4y
JV partner focused on operators for next single-family acquisitions and reviewed other holdings willing to open-up to buy-in, buy-outs
I focused on evaluating syndicators and deals worthy of our LP dollars
Relationships and cash-flow
Became more active from there
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes4y
Have a goal in mind, even if it's a loose one.
If your goal is to build financial security and long-term wealth, but you have no intention of leaving your job for the next 10 years, then the way you invest may be very different from someone looking to leave their W-2 in the next five years. Figure out your "WHY" and then work towards it.
I started with a little hoarder house. I cleaned it up, got it rented, and had $100,000 equity and some monthly cash flow. I thought I was set for life and had acheived my dream. When I took a moment to really think about it, I realized I was limiting myself to mediocrity. I thought about what I really wanted, what would be my ideal life, and what it would take to get there. I set a short-term goal of financial independence in five years (made it in three). As I worked toward that goal, I realized I was still limiting myself to the bare minimum. I set a new pie-in-the-sky goal of $300,000 annual income from my investments ($200,000 for me and $100,000 for charity).
Should I sell a property and take advantage of this peak market? Only if it brings me closer to my goal. Should I buy a fourplex in Columbus, a short-term rental in Florida, or a nice Tudor in Maine? Which one brings me closer to my goal?
By setting goals, it's easier to evaluate properties to ensure they meet my goals instead of just increasing door count.
The DIY Landlord Book4.7245 Reviews - Realtor · Cumming, GA · Member since 2018 · 158 posts · 127 votes4y
I'm an investor and agent and both businesses have grown significantly over the last 2 years. The first step for scaling both has been to get really really good at what I'm doing. So good that I can either teach someone how to do the job really well and provide systems for them to onboard OR be so good that I know how to recognize and attract a talented person to support me in roles that will allow me to scale.
Get so good at whatever you're doing that the only option is to grow and scale.
- Fort Worth, TX · Member since 2020 · 1k+ posts · 2k+ votes4yCould you also look at having someone come in under you to build a team? I would think taking a cut of sale would be more profitable than selling leads. Disclaimer, I'm not a realtor, just thinking about how to keep the most revenue in house.
Quote from @Patrick Kaiser:
For me, as a regular real estate agent, scaling means getting rid of lead generation activities that are taking too much time and focusing on lead generating activities that produce the most reward. I'm also spending time automating my systems within my CRM and consolidating all data into one system. This is an ongoing project I've been working on for several years. I also automated several processes within my business while actually reducing my costs by over 70%. Even though that cost was not a big deal, being able to see everything in one place, from all deals in the pipeline all the way through closing and even beyond, has been a big benefit. I'm also scaling back my outgoing marketing costs and focusing on personal relationships that have been beneficial. Lastly, I'm working on a lead generation system so that I can sell most of my inbound leads for a referral fee rather than trying to work them myself. That will allow me to scale beyond what I can do myself since I have 6-10 active listings and generally 5-10 active buyers at any given time. That's basically my limit so the only way to continue scaling is to sell the leads I don't have time for.
- Fort Worth, TX · Member since 2020 · 1k+ posts · 2k+ votes4y
Quote from @Nathan Gesner:
Have a goal in mind, even if it's a loose one.
If your goal is to build financial security and long-term wealth, but you have no intention of leaving your job for the next 10 years, then the way you invest may be very different from someone looking to leave their W-2 in the next five years. Figure out your "WHY" and then work towards it.
I started with a little hoarder house. I cleaned it up, got it rented, and had $100,000 equity and some monthly cash flow. I thought I was set for life and had acheived my dream. When I took a moment to really think about it, I realized I was limiting myself to mediocrity. I thought about what I really wanted, what would be my ideal life, and what it would take to get there. I set a short-term goal of financial independence in five years (made it in three). As I worked toward that goal, I realized I was still limiting myself to the bare minimum. I set a new pie-in-the-sky goal of $300,000 annual income from my investments ($200,000 for me and $100,000 for charity).
Should I sell a property and take advantage of this peak market? Only if it brings me closer to my goal. Should I buy a fourplex in Columbus, a short-term rental in Florida, or a nice Tudor in Maine? Which one brings me closer to my goal?
By setting goals, it's easier to evaluate properties to ensure they meet my goals instead of just increasing door count.I totally agree that reverse engineering is important to establish the steps you want to take. With my background in education, this was how we learned to create effective lesson plans. What is the outcome you want? Break it back by steps to get to the most basic concept and build. I'm working through that in my business now that I have a few deals under my belt that I was very strategic about. I wanted to make sure I had proof of concept before diving headfirst into a long term business plan. I'm excited to start working on many of these steps because I have a clear "why", which is so important to keep you motivated. The best whys have little to nothing to actually do with money, but may be boosted in satisfaction by having money to deploy towards it. Spending time with family is a great why, and maybe that means going on that bucket list trip you save up for.
- PA · Member since 2010 · 339 posts · 168 votes4y
Scaling typically means buying and leveraging more and more such that one’s equity and cash flows increase non-linearly with time. My scaling goals are pretty modest, though.
I’m old and plan to retire in a couple years. My wife and I started out in the commercial value-ad space almost 10-years ago (a 22-unit apartment building that needed total rehabs on 10). It was though, but I learned three important things: property managers need to be micromanaged, contractors go to more weddings and funerals than any other group of people on the planet and it takes much, much more of my time than expected. We’re small-time investors own several commercial properties with very little debt (30ish percent) because I reinvest everything I make. In addition, I’m near shovel ready on a small land development project where we will build a 20-unit apartment building. Which leads me to what scaling means to me: stop buying stuff, retiring and keeping cash flows for ourselves. In other words, scaling to me means increasing my free time at a non-linear rate.
- 4yDave Van HornPro MemberFund Manager · Wayne, PA · Member since 2009 · 1k+ posts · 1k+ votes
I’ve said this many times but if I had to sum it up in a word, it would be: Leverage.
At first it was leveraging capital, even with credit cards in the very beginning, to purchase more properties. (*Note* I’m not so sure I would use this exact strategy the same way again since this was before there was high cash advance fees) but the point still stands with available lending. This enabled me to buy more houses than I ever could with just my own cash and scale my portfolio. Though I could only grow so much in a silo.
So then, it was leveraging my network. I did this by joining my local REIA meetings to find deals and find sources of more money to accommodate those deals.
But then, I realized, I could only meet so many people this way. And I eventually learned it wasn’t about who I know but who knows me. So I leveraged my network in a new way through Thought Leadership with both writing about my past experience and participating at speaking events across the country. This in turn only created a bigger network for both deal flow and capital.
And lastly, on that note, it was leveraging knowledge. And not just my own as a thought leader to attract things my business needed but it was leveraging knowledge of others to grow. This has been done with the help of a coach. In fact, many coaches. Eventually my company outgrew me and the operations that came with it. Utilizing a coach that specializes in an operation system (in our case we used “Scaling Up”) to not only track progress/outcomes, but to strategize, develop leadership within our organization, and drive accountability/alignment amongst the staff - all of which seriously accelerated our company’s growth and enabled us to scale.
- Member since 2022 · 3 posts · 6 votes4y
so far for me,
celebrating every win, and every new problem-- promotes growth in the business! As a true newbie wholesaler, each step has been monumental. From Research, taking the steps to connect to members of the industries, to seeing houses, to putting out the effort to present an offer on a property, every step I took--I made sure to breathe and whisper to myself 'Im proud of myself,' I know it doesn't seem like hard core meticulous advice, but it does start with the mindset to grow at every stage of the business.
- Real Estate Agent · Temple, TX · Member since 2022 · 1k+ posts · 700 votes4y
Love this question and I think about it often! For me, I am going to scale by selling all or most of my properties, and purchasing an apartment complex. The first step would be to learn to analyze apartment deals and learn what cash flow I can expect. Then I'll have to be sure that the reward is worth the risk. I would expect to at least increase my cash flow by 75%. After I am able to analyze deals and am fairly familiar with the asset class and market I am in, I am going to find and pay a mentor who can walk me through the process and teach me along the way.
- Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes4y
The obvious solutions to scale include leveraging people and technology to automate & streamline your business. Technology is preferable if possible because technology doesn't sleep and can always continue working for you. Leveraging people is definitely useful but requires costs like hiring, training, and management. Dealing with people can be messy.
If you want to scale faster, you need to increase the velocity of money in your business. Basically, you need more revenue and explode income & reinvest into your business if you want faster growth. That could be the difference between "retiring" or achieving financial freedom in 5 years compared to 10 years. I've come to terms with this fact like other buy & hold investors because buy and hold is traditionally a very slow way to build wealth and achieve financial freedom. For sure you'll end up well off if you say buy one property per year and do that every year for the next 10-30 years, but you won't be able to have the freedom to easily live off your investment income in the short term. I used to believe in the philosophy of buying and never selling however I've changed my tune to buy, hold, create additional equity/value, and then sell when it makes sense to trade up to larger properties (using a 1031 exchange would be a plus). Basically the BRRRR model and then sell after a few years. I think of it like monopoly like Kiyosaki talks about or like chess: sacrifice or trade pawns for rooks, bishops, knights, kings, and queens (bigger properties). Flipping and BRRRRing is really just manipulating assets which you can think of as small businesses and then selling them off a profit.
Personally I've started scaling by house hacking and also doing so with a partner (my brother). The problems we've run into are low inventory and thinner cash flow margins due to rising interest rates like other investors.
- Philadelphia, PA · Member since 2022 · 6 posts · 9 votes4y
1031 Exchange is a great tool for investors to utilize when scaling their rental portfolio. It allows investors to sell one investment/business property and purchase another while deferring capital gains taxes, freeing up more capital for the investment in the replacement property.
There are some restrictions that can make this difficult- such as having to locate a replacement property within 45 days and once the replacement property is identified, you have to close on that property in 180 days. When used correctly, there is no limit on how many times you can do a 1031 Exchange- so keep on deferring!
- Fort Worth, TX · Member since 2020 · 1k+ posts · 2k+ votes4y
Quote from @Taylor Dasch:
Love this question and I think about it often! For me, I am going to scale by selling all or most of my properties, and purchasing an apartment complex. The first step would be to learn to analyze apartment deals and learn what cash flow I can expect. Then I'll have to be sure that the reward is worth the risk. I would expect to at least increase my cash flow by 75%. After I am able to analyze deals and am fairly familiar with the asset class and market I am in, I am going to find and pay a mentor who can walk me through the process and teach me along the way.
Are you going to learn the process, then 1031 into the complex?
- Rental Property Investor · York, PA · Member since 2017 · 59 posts · 41 votes4y
@Alicia Marks I think the first step you need to do is pick maybe the top 1 or top 2 pain points in real estate investing for you and then find a way to delegate those out. Either automate them or train a Virtual Assistant to do them for you.
As many have said before this will clear up a ton of your time to work on the stuff you enjoy and are likely better at in the business.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes4yI fell into this whole thing almost by accident. I lost a bunch of money on a new construction project and decided I wouldn't be doing anything again with RE other than the house I lived in. Fast forward 10 years and I had cleaned up that mess and saved a chunk of money, most of which was sitting in the bank making no interest. Then one day I ran a calculator on my pension and realized that if I retired when I had planned to retire, I would have to get another job! That got the wheels turning that I needed to figure out how I could maybe make this chunk of money make some more money (well, that and reading "Your Money or Your Life"). I didn't know enough about the stock market to feel comfortable there, but knew that some people owned houses or apartments that they rented out. So I called a realtor and got him to start showing me what I could buy for $30k (ha! those were the days!). Saw some real wrecks and then stumbled on a house that seemed like it could work. Looked horrible aesthetically and the bathroom floor felt like a sponge (I ended up falling through that floor, lucky the crawlspace was only 3 feet deep there), but having a construction background and knowing how to do all electrical, etc. I figured I could give it a shot. Didn't know how well it would rent or anything, but 2 months later I had it rented for $600. I still had a little money left over from the original chunk so we went and looked at some more stuff. Found a house that I liked and made an offer but it was tied up in a court probate. So we moved on and found another house that I liked and bought it with what was left. A couple of days before we were to close on that property I got word that the probate had cleared and that they would take our low offer if we still wanted to make it, but of course I'd already bought the other house so now I needed to come up with some money. I literally bought the third house with a credit card, since I knew I could put the cash back in a couple of months, using a 0% 18 month offer that I had on hand.
And then it was pretty much off to the races. After I had that third house, I thought I was going to be finished. Then I eventually got them all complete and all rented, doing virtually all the work myself, and because I had paid cash for all of them suddenly $100k that had been sitting there making less than $500 a year in interest was bringing in $2000+ a month in rent. I ran some numbers and realized that if I got to 10 houses it would completely replace my salary, i.e. I could stop working altogether and be bringing in the same kind of money. Not too long after all of that I joined BP and got more familiar with different types of leverage and understanding how it could work for me. Not only leveraging my money by not paying 100% cash for everything, but also leveraging my time and efforts by utilizing outside contractors instead of doing everything myself.
Skyline Properties - PA · Member since 2010 · 339 posts · 168 votes4y
Quote from @Account Closed:
Scaling typically means buying and leveraging more and more such that one’s equity and cash flows increase non-linearly with time. My scaling goals are pretty modest, though.
I’m old and plan to retire in a couple years. My wife and I started out in the commercial value-ad space almost 10-years ago (a 22-unit apartment building that needed total rehabs on 10). It was though, but I learned three important things: property managers need to be micromanaged, contractors go to more weddings and funerals than any other group of people on the planet and it takes much, much more of my time than expected. We’re small-time investors own several commercial properties with very little debt (30ish percent) because I reinvest everything I make. In addition, I’m near shovel ready on a small land development project where we will build a 20-unit apartment building. Which leads me to what scaling means to me: stop buying stuff, retiring and keeping cash flows for ourselves. In other words, scaling to me means increasing my free time at a non-linear rate.
My last comment was true, but a little tongue-n-cheek. The gist is to use real estate holding as leverage to buy time, which I am trying to do.
My wife and I started RE investing 10 years ago when we were 50. We both like our day jobs, so we never got on the “financial freedom” train. We’re smalltime so we don’t need partners. Our strategy has been to buy value-ad commercial buildings, fix them up and hold them. We’ve sold two apartment buildings, though.
To me, scaling shouldn't necessarily be thought of as getting the highest LTV possible. I think scaling is more of a human resources thing. It's simply a matter of increasing the number of man-hours hired to work on renovations. Increasing man-hours means you can stabilize properties faster and move into bigger projects. Borrowing money should be thought of as a "means" to buy man-hours.
In addition to simply fixing up buildings, we’ve adopted the “self-fulfilling prophesy approach to real estate scaling” (copyright pending) for one of our projects. We’ve been systematically buying and improving a group of contiguous properties, consisting of some office/retail/flex-space buildings, apartment buildings, a couple houses and a group of vacant lots where we will build a 20-unit apartment building. Each time we make an improvement on one property, the value of everything increases, as well. This has worked really well. I want to do it again, but I am trying to stop spending my cash flows on the investments so I can buy a new pair of shoes. I’m conflicted.
I see a lot of posts suggesting that one should repeatedly maximize LTVs in order to accumulate as many properties as possible. To me, this seems like linear growth with time and thus does not meet the definition of scaling. In addition, I feel that the multiple LTV approach makes the transition to larger projects more difficult.
In my opinion, real estate scaling cannot happen unless you buy low. I see posts where individuals seem in too much of a rush to buy something. Right now, a lot of people seem to be wanting to hurry up and buy something before the economy explodes. To me, these individuals seem perfectly willing to overpay.
- Investor · Huntersville, NC · Member since 2021 · 52 posts · 30 votes4yHi Caroline! Just curious if you could elaborate a little bit more about why you don't recommend getting into a partnership where you are not the general owner. I know of other investors that have successfully used partnerships to scale, but I would love to hear your opinion on the topic. Thanks!
Quote from @Caroline Gerardo:
Always kept my day job. It provides perspective, leads, training, insurance, and is grounding.
Learn the expensive lessons first: legal, title, construction, and failures.
Measure what you do, how much time it takes, plan in writing goals for 1 year 5 year 10 year. Every year learn a new major skill: accounting or whatever is your weakness. Don't waste your life on TV. Love big. Share your kindness every day with your family, those you work with, and the shiney newbie face who asks. Money comes and goes but the people you love will be there always.
I started with single family which I love and jumped to multifamily commercial then medical office. The principles are the same just add three then six more zeros.
Maintain your own CRM - I bought Goldmine a century ago and many companies I worked for paid for all new gadget CRM but I kept my list my own.
Data analytics is fabulous but does not accommodate all locations. If there are drug dealers out front, a geo disaster like fire and drought ahead, or something that smells dead you need boots on ground.
Don't pay for a class that is available for free. Don't get into partnerships with your inlaws or someone you do not intend to marry. Don't get into a partnership where you are not the GENERAL 51% owner.
- Member since 2022 · 5 posts · 2 votes4y
Leverage is a key theme here. The book "WHO NOT HOW" is a great book for that. I recently went to a Jason Drees Coaching Event and that was LIFE changing for me. It was really the first step in improving my mindset, which opened my mind up to the excitement about scaling and leverage...and saying YES to so much more. (I used to say no A LOT!) Even today I have caught myself getting ready to do things that I have hired leverage to do. I didn't do it and let them do what they are hired to do!
- Member since 2022 · 16 posts · 19 votes4yScaling for me is just getting started.. so going from 0-1 property. I'm securing my HELOC now which has plenty of equity and will give me a lot of options for BRRRR, flips or a buy and hold. I feel like my market prove difficult for straight buy and holds, I will likely only be able to purchase deals that will require some rehab of some sort. I would prefer to find a deal where I can get my investment back out so that my HELOC isn't subject to adjustable rates long term. Right now it's prime minus 1%, so that's favorable. But long term it is risky.
Deciding to spend our retirement $$ on investment properties
Identifying our business strategy: for us self managing, local properties
Identifying the kind of properties we wanted to buyGetting to know the neighborhoods in our investment area
Calling mls real estate agent that we know (she is great for working with investor and very good negotiator)
Finding/Buying our first property (2 4 units) with fannie/freddie loan (learning how to landlord)
Researching and selecting full featured property management software (while waiting for 1st closing)
For second purchase
Researching and talking to DSCR lenders so we could grow (small regional bank)
getting together business plan and personal financial statement
Finding second group of properties 6 duplexs + single family
third group of properties, (exploring options for seller financing part of down payment) (7 unit,, duplex, & triplex
fourth group of properties, Finding a way to leverage equity in second purchase for downpayment 8 duplexes
Finding a commercial broker that would give me the time of day so we could look at bigger properties (more difficult than I expected even though at this point we owned more than 30 properties)
Fifth Purchase a 10-unit group of townhouses
Selling first purchase (in "D" neighborhood) and re-fi of townhouses to pay off 30 renovations.
Purchasing 2 more duplexes next to 8 duplexes already owned
Catching up on renos and then back on the hunt.
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