Unsure where to start or scale your real estate portfolio?
In this video I share the 4 core principles when it comes to Real Estate.
I’ve discovered most people never start or scale their portfolio due to lack of experience and/or money.
Look who it is Tyler Nicholas Bossetti that is right Nicholas is my middle name and guess what they call me Santa Claus for a reason because I’m gonna share I don’t know I have no idea where I was going with that Tyler Nicholas Bossetti here believe it or not they call me Saint Nick and today is Christmas morning and you know why I’m gonna teach you guys exactly how to start and scale your real estate portfolio and do it efficiently effectively and make a ton of money who doesn’t want to make a ton of money.
Dave Ramsey well guess what Dave Ramsey I don’t know where I’m going with this but you probably shouldn’t watch this video that being said there’s four areas that you want to focus on number one how do you actually find deals right there nothing else matters in real estate unless you can find a good deal and you may have to pay for that and what I mean by that is pay for coaches, pay for mentors you know pay local real estate investors to take them out for coffee and say look I’ll pay you 200 bucks to pick your brain for 30 minutes.
You want to connect with wholesalers you want to connect with realtors that get you access to the mls it’s networking I don’t know how to put it people that are going to send you deals you have to talk to so if you’re introverted you’re scared to talk to people this industry may not be for you or you can partner with somebody that has those connections because the second step is funding the deal you have to understand how to work with banks what are they looking for credit income assets and then most importantly how can you get creative.
How can you use other people’s money utilizing private money or utilizing hard money and hard money is essentially an institution and or a bank that connects with private money lenders right they get their money and they lend it to you at a higher interest rate they charge points but they’re a little bit less strict than traditional banks and they’re not really taking into consideration, your credit, your income and your assets as much they’re just analyzing the deal okay.
And so when it comes to private money lenders again you have to network you have to get people on on on board to put money into your deals and understand how to explain to them how they’re protected they’re protected through a promissory note there may be a deed and trust they’re protected through an actual lien on the property and you’re negotiating whatever you want to negotiate with them do you want to give them equity in the property where they own half with you or 25.
Do they want to get a specific debt return let’s say 8 to twelve percent that outperforms the stock market let’s say so that’s the second piece is how do you fund the deal how do you get creative and then you can also use credit you can go get zero percent personal and business credit cards and that can cover your down payment and then you have the private money lender fund the rest of the deal or you get a hard money lender to finance the rest of the deal.
Yes it may be a little bit less profitable but guess what you’re doing your first deal or you’re getting that next deal and that allows you to build a strong portfolio which is the third step is facilitating the process right once you have one project going on or multiple projects going on you have to make sure you have dialed in systems with your general contractor.
Number one making sure they’re licensed insured bonded and because if if something goes wrong on the project they’re not suing you right something happens they fall off the ladder hypothetically you’d want your general contractor to have workers comp and if something goes wrong with the project and the city is trying to find you.
No no no that’s the general contractor’s responsibility and if you’re borrowing money from a private lender that gives them certainty as well that hey look you have collateral aka the property if I don’t pay you back but the guys and or women doing work to the property they’re licensed and insured because the first property I ever purchased literally the first property I ever purchased back in 2016.
Someone broke into my side and lit the place on fire but because I had good insurance right I was able to protect myself and protect the asset and especially if I’m using other people’s money private money I want to make sure my contractors and also the property is insured so making sure you have hazard insurance and or potentially even business insurance.
I have some resources below this video and obviously connect with me if you guys need some some additional help in those areas the fourth piece is dispositioning the deal right we found the deal we raised money and we closed on the deal we got through the construction side or maybe it’s a buying hole it didn’t need much work to it but you have to keep the end in mind like what are you actually trying to do a lot of the deals that I buy.
I’m doing the burr strategy where I buy it I renovate it I stabilize it and rent it out to tenants I refinance and get hypothetically all the money back for the private money and profit for myself and then I repeat that process right so for me 80 of the time.
I have to make sure the numbers make sense from the very beginning and the returns that I’m paying out to the investors actually align because if I go to refinance and have a ton of cash left in that deal it just may not make sense so that would be a part of the 20 of the deals that I do which is just selling the property right and taking that profit paying everyone out that’s involved okay.
And then rolling the additional profit as a 1031 exchange into the next deal to avoid taxes okay so in order to start and scale a portfolio trust me there’s always going to be areas in these four particular areas in this example that are not going to be always buttoned up.
I’m going to be buying deals talking to private money lenders checking in on projects and speaking with banks all at once and you may be doing the same but it’s understanding that it comes down to these four areas and the final piece is management so now that you found a deal you got somebody to fund the deal or you knew how to creatively finance it through the seller or through credit or through crypto regardless you got through the the facilitation with your contractors.
You might have add value to it now we’re dispositioning now we’re going to potentially refinance it and keep it in the portfolio well who’s going to manage it is it going to be you is it going to be your team is it going to be a management company and it really comes down to what I see being one of the biggest struggles for people to scale a portfolio is they’re trying to do everything you can’t do everything and or you can it’s likely just going to take more time and more money.
So for me understanding that time’s my number one asset and understanding that I need to be creating videos like this that can be evergreen and that we can get into our consulting programs and really just make endless cash on the day-to-day stuff I need to delegate right.
I need to automate and delegate that process to a quality management team that in fact has more experience than me and knows how to do it likely much better than me so what I do is I set up a weekly call on Thursdays to go over the bookkeeping go over the vacancy go over all these specific things with the management team to make sure they’re doing what they need to do.
To make sure that we are profitable on deals and to make sure that I am the most efficient that I can be with my time now when I got started I was self-managing right I was the one that was coordinating with the hot water heater to come in coordinating the clogged sinks.
I think in fact it’s potentially in your best interest to try to do everything at first to try to find the deal fund the deal you know check in on the projects with the general contractors because the value that you’re going to get from that is going to likely save and make you tens of thousands or hundreds of thousands or millions of dollars over your lifetime then you understand how to ask better questions.
You understand how to vet contractors better you understand what is a good job versus a bad job you know how to vet property managers better in this asset class whether it’s one to four units or a multi-family unit right but at the end of the day you have to measure your time versus your money for me I have systems and processes in all these different areas and I’m doing checkpoints.
I’m making sure that we’re saying yes or no to new deals I’m making sure that we’re bringing private money in and paying out massive returns I’m making sure contractors and people are doing what they need to do to move the project along and last but not least from the portfolio side I’m making sure that we are profitable to scale and everyone behind the scenes is happy my team the tenants everyone involved so if you’re looking to start and scale a real estate portfolio these are the main areas.
I believe you should have buttoned up if there’s an area that you’re struggling or an area that you want to learn more drop a comment below I’ll do a video on that and hopefully you guys are getting value from my channel if you’re not I don’t really care because I know what I’m saying is valuable and I’m still trying to figure out how to speak in front of the camera it is what it is swipe up click here hope you got value I’ll see you guys in the next video.