The real estate market in Colorado Springs is a lucrative place to invest. Many investors have been able to generate solid profits, and the outlook for the future is bright. In our last blog, we looked at some proven methods to ensure that your real estate portfolio is headed in the right direction.
By way of recap, the first method was to “get in the game,” meaning to buy your first property and get the ball rolling. The second was to utilize the concept of leverage by rolling proceeds from one property into multiple other properties. Thirdly, the utilization of technology and apps helps an investor work smarter instead of harder. And finally, we covered how networking with property managers can help you find properties that become available before they are listed on the MLS. In this blog we are going to cover four more proven methods to ensure that your portfolio keeps moving on a positive trajectory.
1 – The tried and true method of cold calling
Cold calling is not the easiest way for many investors to search for new properties. It is time consuming and can feel like results are hard to come by. It also takes people out of their comfort zones. These are exactly the reasons you SHOULD be cold calling to seek out motivated sellers! Other investors are not doing it, which means they are missing out on a lot of low hanging fruit. Make a script and pick up the phone. Feel free to tweak your script as time goes on, and know that the more you call, the more comfortable you will become with your process. Don’t spend all of your prospecting hours cold calling, but do make sure to block off some time for it every week and hold yourself to that block. The early bird gets the worm, and the investor who is willing to pick up the phone often gets the undervalued property.
2 – Rental properties equal cash flow
Monthly rent payments become a steady stream of residual income for a prudent investor. This cash flow can be used to make improvements on the rental property itself or set aside to be used to make improvements on other properties. Having a renter can also be a good way to find a buyer. Many tenants will eventually inquire about purchasing the property that they are living in. This brings up a lot of possibilities for the investor as far as rent to own or seller financing type arrangements. It gives you added leverage and more options on how you might grow your portfolio going forward.
3 – Recognize and protect your most valuable asset
The most valuable asset in any real estate portfolio is the INVESTOR! It was you who found the properties, nurtured the deals and uncovered the profits and cash flow. As the most valuable asset in your portfolio, it stands to reason that the better your portfolio does, the more valuable your time becomes. A smart investor will find ways to delegate tasks that take their time and attention away from growing their portfolio. One potential way to accomplish this is to hire a property management company. Aside from simply managing your properties, they can also do research, network and assist in bringing additional opportunities to the table.
4 – Know when to walk away and have the courage to do so
Very few investors have a perfect track record. If a certain property becomes unprofitable or takes up too much of your time, it is okay to move on. In fact, sometimes the best thing you can do is to find a way to unload such a property. Human nature is to hold onto it just to save face. The sooner you learn to cut your losses and move on, the sooner you will free up your time, energy and financial resources to find a property that generates a profit.
Be sure to watch for a future blog post where we will discuss some ways to evaluate where your portfolio stands today.