Many people are looking for ways to invest their money wisely in today’s economy, and a lot are already looking into real estate investing as an avenue to build wealth. According to CNBC, 90% of millionaires attributed their wealth to investing in real estate.
Real estate investing can be intimidating for a lot of people. The risk of making the wrong investment and the industry’s intricacies can be challenging for people outside the space.
Real Estate Coach Noelle Randall, a renowned real estate coach, shares how to build a profitable real estate portfolio effectively.
Starting a business
Randall states that the best way to start a real estate portfolio is by making it a business. “If you don’t have a business, you’re personally liable if anything happens,” she says. Real estate investors who don’t start a business risk their personal funds and credit.
Making your portfolio a business gives investors access to tools others don’t have access to. Business credit is the biggest reason investors should start a business, as this provides their
portfolio with a lot of funding to purchase properties and preferred rates with other benefits like loans and credit cards.
Honing the skills required
Randall believes education is one of the most important aspects of starting a real estate portfolio, making developing portfolio management skills highly crucial. She also advises investing in people skills, as talking to people is a large part of real estate investing.
Investing in knowledge also ensures that investors can spot and evaluate market opportunities. Learning financial skills is also beneficial to make real estate investments sustainable and profitable.
Starting and diversifying
Randall believes that when starting real estate, investors should find a niche and specialize in it. This provides a good benchmark on how much they can earn and gives investors something they can fall back on when diversifying.
She shares that diversifying is very important to make a portfolio more profitable and less exposed to risk. Real estate comes in many forms, with each one entailing different challenges. Therefore, an investor should consider focusing on various real estate investments instead of building a single one.
For example, Randall shares that she started her portfolio by wholesaling properties. She later explored flipping properties, fixing and flipping, and generating passive income through rentals after mastering wholesaling. Randall also started a business in short-term rentals through apps like Airbnb. Diversifying her portfolio provided her with multiple income streams and hedged her risk exposure when some of her investments were downtrend.
Building a network
Building a network of contacts is essential to success in real estate. Randall advises attending real estate conferences and events to network with other real estate investors. This provides opportunities to find investment opportunities and partner with other real estate investors.
Randall recognizes the importance of events. With this in mind, she regularly hosts educational conferences to help her students. Her latest one, the GROW YOUR WEALTH Investor Summit, is a three-day conference that brings together like-minded individuals to receive valuable insights from Randall and other real estate professionals.
Creating a profitable real estate portfolio is complex and requires a lot of time and effort from the investor. The success of a portfolio will be determined by how much a real estate investor positions themselves to succeed.