In this episode of the Wealth Well Done podcast, Eric interviews real estate investors Brad Stegall, Isaac Bennett, and Mike Gudat about their experiences and lessons learned over decades of investing. They discuss when is the right time to scale beyond a single-family or multi-family property, managing risk through proper financing and cash reserves, and positioning for changing market conditions. They also give a sneak peek into the real estate development project they are undertaking together on the island of Ambergris Caye off the coast of Belize, including investment opportunities available – and gain practical investment wisdom and insights into this international project.
Here are some topics from today’s discussion:
- The right time to scale
- The right time to go into commercial property
- The importance of financial preparedness
- Invest in Belize
Episode Highlights:
[02:52] When Is The Right Time to Scale?
- To successfully scale real estate investments beyond a single-family or small multi-family property, several factors need to be considered.
- Ensure that your personal finances and current business/properties are stable and running smoothly before expanding. Address any existing issues to avoid chaos down the line.
- Have proper systems in place to handle the increased volume that comes with larger properties, such as dealing with more tenant inquiries and issues.
- Assess your level of experience and expertise and feel comfortable taking on more complexity. Scaling up prematurely can lead to feeling overwhelmed.
- Trust your partner's instincts if they believe it is the right time to sell an asset and use the proceeds to strategically expand your portfolio.
- Have robust property management support when venturing into commercial real estate, which requires expertise in leases, tenants, and other areas that individuals may lack.
[04:46] When is the Right Time to Go Into Commercial Property
Investors can successfully transition from multifamily to commercial real estate with proper property management and expertise.
Mike advises dentists and other professionals to consider owning their own commercial space to maximize return on investment. He recommends working with proper resources and team members to lease up the property and structure contracts.
[12:07] Financial Preparedness
- It is crucial to have a properly aligned balance sheet that matches the level of risk you have taken. Whether you own a duplex and need to repair a $10,000 roof with only $2,000 in the bank or have $100 million in real estate and face a major catastrophe with only $10 in the bank, having the financial capacity to weather any storms is a critical factor that separates those who are prepared for the future and those who are not.
Resources:
www.storehouseassets.com
