There are many benefits of investing at scale.
Of course, getting to scale can be a lot of work too. It takes guts, discipline, and a lot of passion to do it yourself.
One architect turned entrepreneur summed it up when he realized he was working very hard for a fraction of what he could be doing. He realized he didn’t want to build a million things, and sell each of them once, but instead to build it once, and sell it a million times.
It is clearly a lot easier, more efficient and more profitable to do it once, than once for each time you will sell something.
There are many applications and ways to apply this in real estate investing today too.
Make A Single Fund Investment
Instead of going out and having to learn many investment strategies and evaluate all of the assets yourself, and manage them from beginning to end, you could just invest in a fund instead.
In contrast to having to deal with hundreds or properties or mortgage notes to be well diversified and to get the results you want, you could just put your effort into choosing one great real estate related fund.
Then let them do all the work, invest in many things for you, and keep on repeating that. You just collect the dividends.
For Fund Managers
If you already have a fund of your own, you can apply this principle by choosing to focus on one facet of the business.
For example, instead of doing all the fundraising and trying to find the time to secure great deals and manage them well, what if you just focused on your pitch for raising money?
You would clearly get a lot better continuing to deliver your same pitch, and raise more money thanks to all of the extra time you have.
Then outsource all of the back end dealmaking and management to another fund and profit from arbitrage.
For Flippers & Landlords
As a landlord there are ways to streamline the sourcing of deals and property management. Then focus the bulk of your efforts on leasing and releasing those units.
Flipping houses can be one of the most intensive ways to invest in real estate. Still, you could apply this concept by focusing on your buyer list. Focus on lining up that waiting list of buyers. Get this model right, and you can effectively be selling the same thing many times, versus trying to market each property individually and uniquely as they come along.
How are you scaling your investments this year?
Find out more about investing in secured debt and real estate, go to NNG Capital Fund