Are you ready to grow your small real estate investing gig into a real business with a variety of properties and a significant income stream? Transitioning from an experimental endeavor to a full-fledged business can be challenging, especially when it requires the purchase of large assets like properties. How can you make it work? Here are a few tips to find, acquire, and keep a great rental portfolio.
1. Work with a Single Lender
Once you plan to make multiple purchases, it's time to find a lending partner that can cover most or all of your needs. This will save time and money over many years. As you develop a business relationship with a lender, they come to know you and your business and you form a good history as a client. This makes future purchases easier and faster than if you work with new lenders each time.
2. Understand How to Leverage
Leverage, or the strategic use of credit, is important for rental property owners. Much of your business capital is tied up in houses, land, apartments, and commercial buildings. You'll need to decide how to access it and how much to use in order to facilitate new purchases. Finding this balance is a challenge, so you may want to consult with real estate investing pros.
3. Focus on the Right Properties
As you have more capital and a solid lending background, look for properties that are more likely to turn a higher profit — rather than just accepting what you can afford or find on the open market. Be selective, targeting elements that do well in other properties or that are missing from your portfolio. Cold call owners of properties you want. Find off-the-market properties. And network with real estate agents and lenders for leads.
4. Work With Professionals
Finding a great rental or flipping property is just one part of the puzzle. You'll also need to either keep it to earn the profit or turn it around for sale as soon as possible. As your business grows, managing all this yourself will be harder and harder. Create a great team of professionals at all levels to do the work for you. This should include agents, investment lenders, vendors, contractors, and property managers.
Where to Start
Want more tips for growing your landlord activities into a real business? Start by meeting with an experienced lending agency that specializes in investment real estate in your state today. They will help you craft a plan to reach your goals and find the right people to help you get there. To learn more, contact a real estate investing agency.