
July 7, 2021
The 5 Things You Need to Build a $1,000,000+ Rental Portfolio (Ep: 483) | BiggerPockets Real Estate Podcast with David Greene & Brandon Turner
Check out BiggerPockets Episode Page and Show Notes
Key Takeaways
- “Divided 5-ed” strategy – To grow your rental property portfolio you need five team members: a lead generator, underwriter, money raiser, asset manager, and a bookkeeper
- If you can’t be a team leader, be a team member
- “If you’re going to start your own Apple, you probably need to work for an IBM first” – David Greene
- Don’t assume people hate the same tasks that you do
- LAPS funnel – leads, analyze, pursuit, success
- Lead generation is the most important as growth can’t happen without new deals
- Underwriters match opportunities to your portfolio’s growth and investment strategies
- “Take chaos and create order” – David Greene
- Relationships between bookkeepers and asset managers can be vital to connect the numbers to action items
- An asset manager is different from a property manager. An asset focuses on maintaining the wealth of the property rather than the daily operations
Intro
- Co-hosts of the BiggerPockets Real Estate Podcast David Greene (@DavidGreene24) & Brandon Turner (@BrandonAtBP) follow up their discussion on the “Core 4” of starting your solo real estate portfolio with an episode on the “Divided 5-ed” strategy based around the five team members you’ll need to scale your rental property portfolio to new new heights: lead generator, underwriter, money raiser, asset manager, and a bookkeeper
- For more about BiggerPockets Real Estate Investment (@BiggerPockets) community and process, check out their website
Initial Strategy
- Start with your end goal in mind: apartment complex, mobile home parks, vacation rentals, etc.
- You have to buy a product big enough to support your “divided 5-ed” team
- Scaling is hard when dealing with individual properties. Multi-unit deals are necessary for scaling.
- Bigger deals help you get more leverage in all areas of business operations
- Scaling allows you to focus on the aspects of real estate that you enjoy and outsource the rest
- Don’t assume people hate the same tasks that you do
- Some people love working with numbers (bookkeeper), while some people like working with people (lead generator and money raiser)
Lead Generator
- LAPS funnel – leads, analyze, pursuit, success
- The top of the funnel is very important
- Deal with commercial brokers rather than real estate agents for large scale opportunities
- Reputation matters a lot more with these deals, money doesn’t talk as much
- Lead generator characteristics:
- Highly motivated and extroverted
- Good understanding of human nature. They know what makes people respond and adjust to personalities
- Person of influence, large network
- “most popular person in high school”
- Process-oriented- ensures completion of the grunt-work and action oriented tasks
Underwriter
- Underwriters analyze the numbers to see how much you can pay on a property
- Functions as a filter: eliminate properties that don’t work and highlight the details of the properties that could work
- “Take chaos and create order” – David Greene
- Have a system on how to identify a good deal for your portfolio
- Due diligence person – reviews all documents, leases, taxes
Money Raiser
- Also known as Investor Relations
- Needs to be comfortable with phone calls and stay in constant contact with investors
- A large amount of capital is necessary to obtain a commercial rental portfolio of scale
- Bank person: someone who has the patience and knowledge to deal with the slow and technical processes involved with banks
Bookkeeper
- Handles the finance and accounting of properties
- Protects the investment and investors. Checks and balances are important for consistent communication and thorough investment updates
Asset Manager
- Maintains the asset after the deal is closed
- Thinks more bigger picture than a property management: makes sure growth and returns are maintained on property
- Calls for action: advertising campaign, find new property managers, etc.
- Partners with bookkeeper to compares numbers to market trends