Portfolio architecture is the idea of seeing your portfolio of homes as one organism as opposed to every individual house as its own organism.
You want to have some short-term rentals that spit off a lot of cash and some traditional boring rentals that provide very steady cash flow to protect you in downtimes.
You also want to have properties that maybe don’t cash flow great, but they build a lot of equity for you and you’ve built a lot of equity into.
You want to have some properties that over a long period of time, are going to make a bunch of money and some properties that in a short period of time are going to provide cash flow to get you through that long period of time.
You want to combine them all together, so that’s portfolio architecture.
Join me and my team on April 22nd in SoCal as we share how investors are currently utilizing creative strategies to grow and manage their real estate portfolios in Southern California.
We’ll dive into key topics such as:
✅ What are the highest performing property types for investors?
✅ How to utilize different financing strategies
✅ What metrics to look for in your deals
✅ Should you keep your property and rent it out, or sell it based on your return on equity (ROE)?
✅ And so much more!
✅ This will also be a great opportunity to meet other like-minded investors in the local area and network with people who can help you successfully secure your next deal.
The reason that I tend to talk about residential real estate more than commercial is that residential real estate is much more flexible than commercial.
It’s like a jet ski. You can change directions very quickly.
With a jet ski, you can do 360s, you can jump wakes, go fast or slow, or you can make sharp turns.
Versus a battleship, there’s not a whole lot you can do. You go in a straight line and you can plunge through obstacles but to change direction is an endeavor.
It takes a lot of work to slowly turn a battleship from one thing to another.
Residential real estate is like a jet ski and commercial real estate is much more like a battleship.
When you chart your course on a battleship, you put a lot more time into analyzing that deal, underwriting that deal, and making sure your course with that battleship is dead on because if there’s an iceberg coming up at the last minute that you didn’t see or you’re going into shallow water, you can’t turn nearly as quick as residential real estate.
Residential real estate is flexible. However, it’s not as resilient and it takes more work just like you got to pay more attention when you’re riding a jet ski than if you’re controlling a battleship.
There are a lot of people that will try to take residential approaches to real estate and apply them in the commercial world and they’ll crash.
You need to be very sure of where you’re going with a commercial space. It’s a much more long-term approach.
It’s harder to build equity, it’s harder to make decisions, whether it’s multifamily or it’s commercial or it’s triple net, you make a decision when you buy and you’re kind of locked in as far as what you can do.
Don’t forget to set a reminder in your phone that I’ll be on YouTube live tonight at 5 PM PST with Kyle . We’ll be talking about the housing market and what you can expect this Spring.
Come join and ask us questions!
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