7 Tips to Grow a Flourishing Portfolio in Your Own Backyard
CONTRIBUTING TO THE RENEWAL OF VIBRANT COMMUNITIES
by Josh Shein, partner, Trius Lending Partners
F or more than 18 years, Partners has funded loans for residential investment properties, fix-and-flip and rehab projects, and commercial properties, contributing to the renewal and growth of vibrant communities throughout the Mid- Atlantic. From our vantage point, and especially our role in enabling Baltimore’s tremendous growth, we have learned more than a few lessons and want to share some of our top tips with you. TIP 1 Work Local & Think Local Know Baltimore. Each city is Baltimore-based Trius Lending unique and ours is no different – things can change from block to block. To be successful, you need to know the nuances of each neigh- borhood where you are considering investing. Online research is easi- er than ever but talking with other people will give you the edge. To find hidden pockets of opportunity, research closed sales histories to understand prices and returns as well as the risks and pitfalls of pick- ing the wrong areas. Always remem- ber, bad renters and bad buyers will hurt you. TIP 2 DevelopYour Network Relationships are everything so keep building your network of con-
tractors, realtors, wholesalers, title companies and other investors. Your competition is not your enemy but a fountain of knowledge. TIP 3 It’s All About Leverage! Learn how to optimize other people’s money and your own. Is it better to invest all your cash to buy property or does borrowing some of the money free cash for other investments? If you have $100K, will buying one property yield a higher return than purchasing four proper- ties with a lending partner? Under- standing the power of leverage and the different funding options to maxi- mize your investment and profit. TIP 4 KeepAmbition Realistic No one makes $50,000 on every flip – especially at the beginning. ROI is key. Run proformas and cal- culate projected ROIs. Key metrics include purchase price, seller’s contribution and rehab budget. Your network comes into play with the right, or wrong, rehab budget and buying right is essential. It is up to you to do your due diligence and compare estimates to see what was missed or incorrect. TIP 5 For Flipping You don’t have to wait until the rehab is finished to sell the home.
Pre-sell the home with “Coming Soon!” signage and invest in stag- ing to enhance the right buyers and shorten the sales cycle. The quicker the sale, the better the return. TIP 6 For Buy & Hold Add management companies and Section 8 administrators to your net- work. Always qualify your tenants. Budget for background and credit checks, as well as tenant screening services recommended by your net- work. You can also find them online. TIP 7 Have a Plan &Work It! Find your focus: single or multi- unit; flip or rent; residential or commercial; land or development. It is easier to grow as you focus your expertise, contacts and connections around similar type projects. Our tried and true formula to grow your portfolio and wealth is to continually buy, while holding one and flipping the other two. Each flip provides more capital to invest. Keep working the formula and diversify to keep the cash flowing to you.
Our teamwould love to be in your network and help you grow and learn. Call me at 410.580.0870, email jshein@triuslendingpartners.com or visit www.TriusLendingPartners.com.
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