Raul and I have been playing golf together for years now. We try to meet on a regular basis year-round, but it’s not always easy to do when the weather—or work—interferes. As a full-time real estate investor, my schedule is pretty flexible. Raul, on the other hand, sometimes has to go into the office on the weekends. Lately, though, he’s been talking about leaving his corporate job to start a business in real estate investing, like me. But, being that he’s getting up there in age, he’s concerned he won’t be able to grow a new business, or the income he needs to support his family, fast enough to justify starting over. So, during our last round of golf, I offered to give him some practical tips on how to buy multiple properties and improve his chances of building a successful real estate investment company quickly. And, much to my friend’s credit, he took it.
Practical Tips for How to Buy Multiple Investment Properties Fast
I understood Raul’s predicament and the concerns of other would-be investors like him. Shifting careers midway through life is a scary proposition—particularly if you’re moving from a reliable source of income into the unchartered territory of being an entrepreneur. And, there are risks to investing in residential property, too, that you don’t necessarily find in other industries. So, if you’ve got a family to feed, or just want to maintain your usual standard of living, you may not be able to afford to lose even a little money on what you thought was going to be a big deal. Just as importantly, you may not have enough time on your side to simply cobble together an investing career at a part-time pace.
By investing a lot of hard work and employing the right resources, it is possible to buy multiple investment properties at a rate that helps you build your full-time investing career quickly. Here are the tips I shared with Raul on how to do just that.
- Buy below market rates. Whether you’re buying investment property to sell or keep as a rental, it’s important to pay as little as possible. This provides you with the opportunity to realize a potentially high return when you sell, especially if the difference between your purchase price and the property’s After Repair Value (ARV) resonate with your business goals. To realize optimal returns, however, you need to know how to valuate a property from the get-go and pay only a price that leaves you with good dividends on the backend. One bad deal can make your entire budget and strategy go astray. It’s critical to see good returns on your investments fast to have available funds for buying more later. And, you start by buying low.
- Invest in sweat equity. By taking the time and energy to rehab your properties, you increase their value. And, when you sell at that increased value, you improve your chances of being able to fund more deals. The updates don’t have to be major ones, either. Even inexpensive repairs can make a big difference. A coat of fresh paint, a new garage door, and a simple kitchen renovation on your investment property, for example, can boost the value of the home above what you paid to buy and rehab it. The boost can even be a big one if you were you able to pay a small price to begin with. Then, with what you get from reselling, or even renting, the property you can buy another one—and another one after that.
- Reinvest your proceeds. Of course, in order for you to be able to take advantage of additional real estate investment opportunities that come your way, it’s imperative you’re ready to reinvest any proceeds you’ve already earned. As obvious as that may sound, it’s not always easy to do. But, just as you saved to provide a down payment on your first property, you must continue saving so that you can do the same on future properties. So, if you own a rental that generates a passive income every month, put that money aside. And, if you strictly want to buy and renovate homes to resell, stash away the returns on those too. In the beginning, it can be tempting to spend what you make—especially if you’ve got bills to pay. But, if you don’t save now so that you can reinvest later, growing your real estate portfolio—and your business—can grind to a halt.
- Fund projects quickly. In addition to having access to cash that you can use for down payments on multiple properties, you’ve got to have other ways to fund the purchase and rehab of potential projects quickly, too. Otherwise, you could easily miss out on good opportunities that do arise. Most real estate investors get hard money loans since both lender approval and the disbursement of funds can happen fast. Plus, you can usually make interest-only payments throughout a loan’s term, which further frees up your cash should you find another property to purchase. Interest rates and other fees can be high with these loans, however, so be sure to compare lenders to ensure you’re getting the best deal.
- Find solid leads. Of course, none of these tips will do you any good if you aren’t finding enough leads on potentially good deals to buy anyway. And, it’s not just the quantity that matters, it’s the quality. Leads on distressed or undervalued homes that may be for sale, but that go nowhere—like those frequently found on lead lists—will only waste your time and stall your progress. You need to find leads that have a high probability of converting to sales, most of which tend not to be advertised. That’s why your lead-finding strategy should include how to find off-market properties on an ongoing basis that you can buy at a discount—and as often as you prefer.
Buy Multiple Properties Faster With Better Training and Resources
When I left my old job to start investing in real estate, I immediately became an independently owned and operated HomeVestors® franchisee. Without even realizing it at the time, I gave myself a leg up by joining the “We Buy Ugly Houses®” team, in part, because of the week-long initial training I received from the get-go. So, by the time I was out in the field and ready to start investing, I already knew some of the best way to buy multiple properties to help grow my business fast—getting a steady stream of qualified leads. Thanks to the marketing tools and resources that being a HomeVestors® franchisee provides, I got immediate access to those kinds of leads. That, coupled with a commitment to work hard, helped me to build the business I wanted as quickly as I needed. Raul is now on his way to doing the same.
Get practical about investing in real estate so that you can grow your business to achieve your career goals at the speed you need. Contact HomeVestors for tips on how to become a franchisee today.
Each franchise office is independently owned and operated.