My journey has been much like playing Robert Kiyosaki's popular game CASHFLOW®. I started by doing small deals, then gradually moved on to doing bigger deals. But, looking back, there is at least one thing I would have done differently. While I was building my portfolio, I would have partnered with a sponsor on a larger deal.
When you are under capitalized, you are not only taking greater risk, but you are also cutting off your property's maximum potential. So, know your CapEx budget, and don't ever go in under-capitalized.
What if I told you it is possible to reduce one of your largest expenses by as much as 50%? It's completely true, and I'm going to "spill the beans" on how to do it.
I have always been a huge advocate of using professional property management. That doesn't mean you should take a complete hands-off approach though. The most successful multifamily real estate investors I know are all active owners, or they have delegated the responsibilities to an experienced asset manager.
Some people wonder why I have begun investing in DFW (Dallas/Fort Worth) when I already have such a broad portfolio in Denver. It is because I understand both markets, and I already know how to start an out-of-state investment portfolio. Let's look at the numbers...
I once heard a successful real estate investor say, "The bigger the deal, the easier it is." It wasn't until I had begun to acquire a large portfolio of single-family homes this fully resonated with me.