Are all your eggs in one basket????

Question

We all know the saying "dont put all your eggs in one basket". But how many of us actually listen to that advice when it comes to our real estate strategies? When the down turn of the market hit my business suffered large losses which mainly focused on rehab/flips. After picking myself up off of the floor I realized that I had put all my energy into one area of investing whereas I should have had a couple different avenues. I have made the changes and business is improving. One of the best additional services that I offer is marketing services for other investors. Since we have experience in marketing our properties for sale/rent I thought why not offer that service to other investors for a small fee. I 
          
What specific changes have you made to your business to make it more profitable and less likely to suffer in case of  changes in the market?

Michael P. · Answer

Well lets see...

I drastically lowered the price of my rehabs I had on the market and moved them.  Things were looking poor and holding costs were killing me.  I sucked it up and made far less than I wanted.

I have since remained on the side lines analyzing deals very thoroughly.  I have just recently started making offers again and will certainly be buying some houses soon.

The downturn in the market made me realize I need to protect my future income from these down turns.  Some day a wife and kids are going to depend on me and I need to set myself up for that.  So I have gone from thinking short term to thinking long term.  I have been spending the majority of my time lately trying to figure out how to buy an apartment complex.

Brian Levredge · Answer

I was doing high end rehabs going into the top of the market and got out before things went south.  Unfortunately, I pumped the money I made into my construction company which took a pretty big hit.  I decided after that to get into buy and holds to supplement things as a hedge against the market cycles in construction.  I am also getting into wholesaling which I will combine with rehabs again to start pumping things back up.

Account Closed · Answer

I think that all the baskets got a bad smack-down with this economic down turn.

However, I agree that it is good planing to have multiple job skills and different ideas about how to do business. Adaptibility is a good thing.

Account Closed · Answer

Downturn doesn't always equate to more tenants. No jobs sometimes means that the working tenants move away, trying to find jobs elsewhere. (not disagreeing with the idea of owning rentals, since that is what I do)

Besides the real estate, I bake and sell gluten free cakes and cookies.  That's about as far as you can get from having all your eggs in the real estate basket. Some of my eggs are in carrot cake.

Ty Hines · Answer

P NW- Thats funny, I love to cook also especially baking. At one time I thought I wanted to be a chef.

Micheal P- You have a few things to be thankful for. First you made SOME money on your deals. Second you dont have a family to support NOW. And Finally you have the smarts to change your investment goals from short term to long term. From what I read on BP, texas is great place for apartment investing.

Shaun Steckler · Answer

You can't go wrong with rental property.

Houses and small apartment buildings are a great way to start.

As a result of the downturn, we now have a stronger pool of tenants.

I guess when something bad happens, something always good happens too.

When the market starts to rebound, one idea would be to take the profits from your flips and pay off your rentals.

The endgame of course is to control a portfolio of free and clear properties.

This is a goal for us all, no matter how your real estate business is currently weighted.

Hope this helps.

Ty Hines · Answer

I would love to hear from anyone that have made changes big or small. There are many looking but a few talking. Any idea might help others. 
          
Here's one- property preservation. If you have experience in rehabs this should be easy.

Ted Harris · Answer

Some may think having all or most your income from real estate is 'putting all your eggs in one basket' but I agree that being flexibile and having multiple income streams within real estate is prudent and good enough for me assuming you work hard (and smart).... recently, I've added rental income to my business model - taking more of a long term approach rather than always thinking short term with flips and real estate commissions.  :D

Are all your eggs in one basket????

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