Memphis Real Estate Investing

3 min read

4 Things to Know About Expanding Your Turnkey Real Estate Portfolio

Thu, Oct 12, 2017

turnkeyrealestate-scalingportfolio.jpgNew turnkey real estate investors are often excited to see those first few passive income checks come in at the end of the month. It’s thrilling to start earning passive income! It doesn’t take long to start wondering how you can start scaling and growing your streams of cash flow. After all, it takes more than one property to sustain your financial future!

But scaling—that seems like a big deal, doesn’t it? For turnkey real estate investors, scaling isn’t scary. It doesn’t have to be a big production. Still, there are a few things you need to know before you expand your portfolio.

4 Things Turnkey Investors Must Know About Scaling

It’s not like scaling as a solo real estate investor.

Solo real estate investors—those who are doing it themselves, hiring their own people, finding their own properties, so on and so forth—are facing a whole different animal than a turnkey investor when it comes to scaling. They have to make sure that their systems can handle multiple properties. It takes knowing that everything works, everyone works, and everything is right. It’s stressful. It takes a lot of work, a lot of coordination, and a lot of knowledge. It takes the right team and the right procedures.

For a turnkey real estate investor, you shouldn’t have to worry about all of that. You’re working with a group of professionals who are experienced hundreds of times over in scaling real estate portfolios. They’re in the business of handling more than one property at a time! You should be able to rest in that with confidence. There should be no fear that you or your team isn’t ready to scale on an experience or intellectual level. If there is, you might be with the wrong turnkey provider!

The most important thing is your finances.

When it comes to scaling as a passive real estate investor, the most crucial element is your finances. Can you afford to scale? It depends on a few factors: the cost of the property you want to purchase, the financing strategy you choose, and the capital you need to set aside for emergencies. By now, you should have passive cash flow providing this for you. Let your investments fuel further investments as much as possible, especially as you continue to grow.

Examine your finances and ensure that purchasing another property—be it with bank financing or otherwise—is a comfortable decision for you. It has to be right. If it’s not, wait. It will be in time.

You shouldn’t have to be any less passive.

Just because you start scaling doesn’t mean you should have to work any harder for your properties. While no investment should be totally hands-off, a passive turnkey real estate investor shouldn’t have to worry that growing their portfolio is going to put an extra burden on them. If it does, again—it’s a red flag.

One of the differentiators between turnkey real estate and other investments is that the bigger you get, the more you typically have to take on. If you’re going at it alone, there’s only so much you can do. Eventually, you have to hire managers and assistants and Realtors and contractors. It can get expensive and complicated!

One of the biggest advantages to turnkey real estate is that even though it might seem a bit more costly to buy a turnkey property, you’re gaining the convenience and ease of services. That’s where it can become too complicated and a make-or-break situation for other investors.

Communicate with your turnkey provider.

Does the idea of scaling excite you? Make you nervous? Talk with your turnkey provider. They are wells of information not only about their own companies and processes but about the industry as a whole. If you want to know how something works, ask. They can clarify and work with you to ensure that growth is the right step to take for the health of your portfolio and point you in the right direction for financing.

Remember: your turnkey provider is more than just someone to buy investment properties from. They should be invested partners for your success. You should be able to have a conversation with them about your financial future openly and honestly!

Learn more about building your portfolio today.

Submit Your Feedback

Chris Clothier
Written by Chris Clothier

Entrepreneur, writer, speaker, ultra-endurance athlete, husband & father of five beautiful children. Chris puts these natural talents on display every day. As a partner at Memphis Invest, Chris addresses small and large audiences of real estate investors and business professionals nationwide several times each year. Chris is also an active writer, weekly publishing real estate, leadership, and endurance training articles.