How to Scale Your Portfolio with Confidence (Minisode)

Welcome ladies to The Real Estate Investor Show, providing inspiration, strategies, and insight to empower women investors to live balanced and financially free lives. Now here are your co-hosts, Liz and Andresa Guidelli. Welcome back ladies.

This is Liz and this is Andresa.

Welcome back to The Real Estate Investor Show. Where we are all about empowering women to live a financially free and balanced life. And we do that twice a week, right, Andresa? And this week is all about a mini-episode where we dive into a topic and go as deep but brief as we can and try to keep it 10 minutes or less, because we know you're busy ladies and men who listen to our show, and we just want to be respectful of that and give you a nugget, give you a few nuggets to take into your day and to apply to your investing strategies.

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Okay, so Andresa, here's what I wanna talk about. You and I get the opportunity and the honor to speak at a lot of different conferences and, and in groups. And the topic of scaling, I think, is such a big topic in our space. Right. And there's so many, right, BiggerPockets forums and so much conversation in the investor community about scaling. And I know you and I teach a lot about strategies and ways to do it, but I wanna talk about, as we talk about scaling today on this mini soda, I really wanna put out a couple, couple key questions before we even get into like strategies on how to scale, because scaling isn't for everyone. And you can actually achieve, there are people who achieve their financial freedom goals without scaling. So, The question really is about, and Andresa so beautifully said this as we prepare for all of our episodes, are you scaling or are you growing? Or are you scaling and growing? Really, it's, it's twofold. And so this is the, the first question is, is it's not just scaling for scaling, just to say you have more doors or you have more properties, but is it gonna help you grow to where you need to be both in your financial goals and also your own personal goals, right? Who you are. So, so those are really important things. I don't know if you wanna add anything, Andresa.

Yeah, I think there's a difference between scaling and growing, right? Because many times, like, if I duplicate what I have right now as is, and let's say it's chaos, right? I'm duplicating chaos. Scaling is when you take yourself out of the picture, when you automatize, when you build teams so you can get the hell out of your own position. So think about that. There's a difference and it's not a matter of quantity. You can do that with one house, two houses, just what is important to you.

Yeah. And doing it with confidence, right? Because sometimes when we're scaling, it's scary, right? It's, it's a little nerve-wracking. It's like, wow, I know I can handle this, but how can I handle that? It's also not the whole concept of who, not how. And I'm going to speak to that. So I have a few suggestions for you, a few ideas. And before I go there too, is get reconnected to your lifestyle goals, get reconnected to your goals, short-term, long-term. You know, there was a woman who came up to me at a conference and said, hey, I think syndication is the right thing for me. I said, that's great. Why? She goes, it's just something I haven't done. And I think that's how you get into bigger deals. And I said, that's true. I, we've syndicated more than 11 projects. You know, we've syndicated for a number of years. I said, what are you doing now? She's like, I'm buying fourplexes. I said, how far are you from your financial freedom goals? She's like, I'm about $500. I'm sorry, $1,000, $1,000 off from my financial goals in one month. I said, well, why don't you buy a couple more fourplexes? That seems like it makes more sense. Well, why do you say? I said, well, syndication is a whole other business. Not saying you can't do it, or it might be a good pivot for you, but if we want to achieve our lifestyle goals, and she wanted more time with her kids, and, and, and I obviously had talked to her much more, knowing her lifestyle goals and her, her personal goals, it just made sense to keep doing what she was doing and, and add on versus kind of pivot. And there's no right and wrong, but I'll just say that it's not always what Bigger is not always better. And I know Justin and I speak a lot about that on our podcast, but I wanna speak to that too. So let's go through just a few key things to think about when you're scaling. I can't speak enough about it, but the power of focus, the power of focus gives you freedom. And I talked about this in the past, but the amount of different things I got involved in when I started, and for the first 6 years of our investing career, me and my husband Matt, we got involved with so many different pieces, so many different asset classes, so many different strategies. And that really slowed our growth hands down. It made for great lessons and great teaching points that now that I can share, but in terms of growth or scaling, completely slowed us down until we got focused on multifamily, not just multifamily, but we said we're gonna start with small and we're gonna scale into larger buildings, but it's gonna be the same asset class and the same market initially. Then we pivoted out of the initial market into a new market when it was the time was right. I just say that because right on, Jessa, we talk about focus, focus, focus, but it, there's such power and leverage in focus. So I just wanna really make that clear. What can you focus on to scale? That's a really important question to answer, what you can focus on to scale.

And it's a challenge, I think, especially nowadays because many people see different asset classes and say, oh, they're saying this is the next thing, or they're saying that now with the market, there's potential on, on this one. And I'm not saying that there isn't, right? With women, we can make it work, whatever strategy you pick. You're gonna make it work. That's not even the point. Just pivot, pivot to a new, new area and focus on a new area or continue on the one that you are in. But either way, the focus here that Liz is so eloquently telling you that had you know, affect her growth. I think that, that's the key.

Yeah. And you know, it's funny cuz our unit size increased, but our asset class remained the same. So there is something you are mitigating risk with that. Now, new markets pose a new risk, right? Because it's a new market. But you know, I think, you know, again, you just wanna continue to ask as you focus on something to scale upon, again, how can you mitigate risk, right? That's the big question. Second thing I wanna share with you is obviously the financial management. I can't stress this enough. If you're gonna scale your portfolio, that is critical, right? That's, that's not even just important. It's critical. Couple of things. Number one, if you're not really managing your 3 single-family homes or your 5 single-family homes and you wanna scale, the ship will sink, right? If you're not managing what you have financially, what's coming in, what's going out, what are things costing me? How can I reduce my expenses? How can I increase income? Do I have a good hold where my cash flow is? All those things. If you don't know that for the 3 units, it's really gonna get really messy on 10, 20, and further. So nip all that in the bud, you know, nip that in the bud now when you have a smaller portfolio so that you're in the position to scale. I would even go one step further and have a hold on your financial house, personal financial house. Again, income expenses to have a general, obviously not general, you need to know your numbers, And the more you know your numbers, it's gonna make you feel more comfortable being able to scale. The other big thing is obviously creative financing. A lot of people who scale into larger buildings or more units do with other people, right? And there's a lot of ways to do that, but obviously you've probably heard me talk about private money and us about private money in the past. But think of it in 3 buckets: debt, which is private lending, small equity, which is like literally partnering with another active person to go in and buy. Maybe that duplex or that fourplex or that 10-unit, and then it's large equity, right? And that's really more on like the passive side where you're literally syndicating and you're working with passive investors. That's literally our process in terms of, of how we kind of got to the BRRRR strategy, small multis to large multis. But again, creative financing, if you know nothing about that and you only use your own money, don't be scared to start asking the questions. Start educating yourself now. On how you can finance bigger properties and, and bigger deals, especially if you are kind of committed to scaling. You don't need to pull the trigger right now. Start asking the questions and getting familiar. And the last thing I wanna share here, I can't stress this enough. Andresa and I talk a lot about this, is just the power of partnerships and teams. You cannot scale by yourself. Really, really hard. It's really, really hard.

What?

I know. And, and, and we know that theoretically, Andresa, so let's just call it really, be really straight with all of you.

But we try to scale by ourselves.

but we try to do it anyway. So, you know, it, it's really easy. And I, I speak to this because we managed everything locally cuz everything was in 30 minutes. So when the tenant needed, tenant had a problem late night, oh God, you would go out to do that. No, no, we did all that. We, we've been there and done that. And so as we started to scale outside of our market, local market, it's one of the best things that could be for us because we're very hands-on people who like to do everything. So it's actually The perfect way for us to expand and start to get a little uncomfortable, quite honestly. First an hour and a half away and then a plane ride away. Most of our assets are not close anymore, the majority, right? So I, I say that because as you navigate with meeting people at meetups, investor meetups, you go to conferences, InvestorCon, you're going to different REIA meetings, you're, you're meeting people on a business level, outside real estate investing, outside of real estate investing. Start to get really good at meeting people and saying, okay, what do I need to scale? And who are the people that can maybe help me get there? And just start to be mindful of that before you go into that next meetup, before you go into that, you know, event, before you even go into a nonprofit, you know, kind of like, you know, charity event where there's some great, great events to go to, to meet high-level people in your community that might be able to invest with you, by the way. So those kinds of things, go into it knowing what value you bring to the team. If scaling Vacation rentals is what you wanna do. Know what value you bring and then start to say, who do I need to help me get it to another level? Do I really need an ops person? I'm really good with people. Or do I really need the money side? Or do I really need boots on the ground? I just don't have that local team in Orlando that I really need, whatever it is. And that's what I have for you today. I think focus first off, do some soul searching. Is scaling right for you? Are you scaling or growing or doing both? And they're not all are created equal. Do some soul searching, get, get really clear on the focus of what you're going to go after. And then obviously get really clear on your money, relationship to money, all of the above. And then how are you gonna source money for your bigger deals? And obviously the partnership and the team. What are you good at and who do you need to help you get to where you wanna go?

Love it. Scaling or not, just fire yourself from your position. I hope you enjoyed this episode. Please let me know what you would like to know more about, and we are here to serve. Have a great day. If you enjoyed this podcast and want to receive updates on our next interviews, go to our website, therealestateinvestor.com. There you can subscribe to our show, become part of our investor community, and get updates on upcoming episodes.

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