Maximize And Grow Your Bottom Line

By on June 28, 2019

It is not how much you make, but how much you keep. Investing in real estate has many stages. You must find good deals, do the right work and then sell the property to generate a profit. What you do with your profits will often determine your long-term success. If you celebrate like you won, the lottery your success will be short lived. On the flip side, if you are savvy with your money you will be able to build on it for the future. This isn’t always easy but is essential if you want to grow your business, and ultimately your bottom line.

Making the right financial choices is as important as finding good deals. Anyone can close a few deals, but if you want to be in real estate for the long term you need to be good with your money.  Here are five tips to help maximize and grow your bottom line.

  • Think ROI Not Activity: The goal of any investment is to generate a return on your money. This sounds obvious, but many investors get caught up in the moment. Instead of being patient and waiting for the right spots, they become bored and expand their investing criteria. They tie their money up in investments with little to no upside just because they feel they need to do something. You are always better off waiting for the right situation than forcing the issue. Your decisions should always be based on the potential return on your money, rather than impulse. Even if your money is not doing much for you, never reach or force the issue. Another opportunity is always just a meeting or a phone call away. Having extra capital in the bank won’t go away if you don’t use it for a while. Savvy investors use that money to generate more rather than making rash decisions.
  • Multiple Income Streams:  The best investors never put all their eggs in one basket. They are smart enough to diversify their portfolio and find multiple income streams. You can always have a bread and butter niche that is your primary source, but you should be willing to look elsewhere as well. Rehabs and flips can be 80% of your income, but you should look at a few buy and hold rentals as well. If you already own a rental property, think about expanding to multifamily or commercial. Inside the business you should think about how you can make money or maximize profits on every deal. There will be times when wholesaling a deal to a fellow investor makes more sense than making an offer on it. You can also look to partner up in the right situation or if you have surplus capital financing a deal. You may want to even consider getting your real estate license to earn commission or save money on the deals you are a part of. The more income streams you have, the stronger your portfolio is and the less chance of anything happening to it.
  • Utilize Financial Experts: The smartest people in business, and in life, know what they don’t know. Instead of thinking they are experts in every area, they are willing to take a back seat to people smarter than them. This is especially important when it comes to managing your finances. Even if you think you know money, you are probably not as sharp as an accountant or financial planner. Utilize these people and listen to their advice. They will have ways to make your money work for you or places to consider parking it. You may not be crazy about thinking about the future, or putting a little more towards retirement, but it is often the smartest thing you can do for you and your business. Never be so stubborn that you don’t take advice from experts.
  • Know When To Pass:  One of the hardest things to do in any business is pass on an opportunity. This is especially the case in the world of real estate. It may be a few weeks, even months, since your last deal. You are feeling tempted and pressured to make something happen and get something in the pipeline. As difficult as it is, you should never buy just for the sake of buying. It is ok to wait until something that makes sense comes your way. This doesn’t mean you can’t tweak your guidelines or expand your comfort zone. It means that you shouldn’t be reckless and take chances that can have severe long-term consequences. Waiting between deals is tedious and can be disappointing but think of the damage a truly negative deal has. Knowing when to pass, and actually doing it, can be the best decision you make for your business.
  • Avoid Unnecessary Expenses:  One of the trickier things in business is knowing when to grow and when to keep things status quo. There is the tendency to want to expand when things are going well. You double down on your marketing and start looking for office space. As good as things may be right now, you need to always give yourself a safety net. What if the deals you are working on fall through? Can you pay the rent without stretching yourself too thin? Can you handle the call volume if you ramped up your marketing? Even if you can, do you really want to? If you grew your business from your home office, why do you need to get out of it? The more expenses you have in your business, the more income you need to generate just to break even. Never add expenses just because you feel you have to.

Making smart decisions with your money, and what you do with it is essential for growth. Don’t be the investor who is closing deals and has nothing to show for it.