How do you build a real estate portfolio?
Well, one of the ways is by leveraging the current properties that you already have to buy more.
How do you do that? You do value-add improvements. So you bring value up, and then you look to do things like a home equity line of credit against that property, a cash out refinance, or potentially selling it so you can double down.
Of course, you can buy more properties through the cash flow of your current properties but a lot of times, in a best-case scenario, I see that takes like six to seven years; wherein like a two-year time horizon, if you play it smart, you can bring the value up and you can double down and keep multiplying that portfolio much faster.
I recently had a client buy three duplexes for the price of one. How did he do this? He did it on a 10% down contract for deed. Now why three for one? Well, if he were to purchase this on a 30 year fixed mortgage on a traditional route, he would have put about 25% down, add the closing costs on top of that, he would have put about 30% down.
There are ways to get creative and to buy properties faster, you just need to think outside the box and go after some off market properties. Which takes a little bit of work, but the reward pays off greatly in the end.
One of the best ways to find off market properties is to look for a list of investment properties. Most cities have a rental license database, which means that anyone who has a rental property has registered with the city.
Someone who is renting out a property is more likely to sell a property than someone who is living in a property because it is just a financial move for them, not a big lifestyle change.
So call a rental license database, call the phone numbers, email people, that is going to be the easiest way to find an off market deal and start adding to your portfolio.