Expanding your property portfolio requires more than just money. What’s even more important than money? Smart planning. Becoming a truly savvy real estate investor requires a mix of creativity and strategy, knowing how to allocate your funds, partner with other professionals, avoid common pitfalls, and more.

Without a plan, one might end up squandering their investment. That won’t be you, though…absolutely not! By adhering to the following insider tips, you’ll be one step closer to growing your portfolio.  

Get creative with investment financing

Scaling your property portfolio from a single unit to an apartment complex requires creative thinking. But buying your first rental property is the most challenging part.

How do you land that first deal?

Liz Faircloth, co-founder of The DeRosa Group and co-owner of a network of over 700 rentals, recommended a strategy that’s worked for her on The Investor’s Podcast Network.

We’ll boil it down for you: There are many older landlords who no longer want to self-manage their properties. Some of them have owned and managed duplexes, apartments, and large multis – all by themselves. If you can connect with them at the right time (via sites like Realtor.com and Zillow), this could be a fantastic investment opportunity for you.

Some of these folks have owned these properties for years and are emotionally invested in them. Still, they might be willing to sell if the offer is right. You could consider offering them 20-30% equity so that they remain a part of these properties. Meanwhile, you don’t have to take on the full burden of the investment and it gives you a great start!

“You need to know what’s important to the person and what’s really important for the project,” Faircloth advised.  “If we bought a building and kept a 30% equity as an investor and gave the remaining 70% to the landlord, it financially doesn’t make sense for the investor.”

“Creative financing is all about figuring out how to meet that person’s needs and also meet the needs of the project,” she explained. “And, if you can’t do all of those things, it probably isn’t a good fit.”

Avoid common mistakes at all costs

Successfully growing your property portfolio also means avoiding snafus that could curtail your profits.

These include failing to recognize the need to hire a professional (such as real estate agents, contractors, property managers), not diversifying your portfolio early enough, underestimating associated costs, and ignoring your due diligence.

Look for properties outside of your geography

The best property investment deals won’t be limited to your zip code, of course. Don’t hesitate to step outside of your immediate geography to look for rental properties. There are many tech solutions available nowadays that can make property management easier, even from afar.

Of course, pairing up with a local real estate agent also helps. This not only opens up potentially profitable opportunities, but also diversifies your real estate portfolio.

Remember, if all your rentals are in the same location, they’re vulnerable to the same risks. A weather disaster, for example, may impact all of them at once. It’s your business – let it spread its wings (and its geographic footprint).

Develop a robust network

Networking is the Holy Grail of real estate. You need the help of other real estate investors (and should help them when they need it), as well as reputable contractors. These folks can help you access more resources, alert you to new opportunities and increase your local knowledge base. Moreover, you’ll also be able to more easily track new developments and real estate trends. That’s how you grow a healthy real estate portfolio: intentionally and strategically, and never totally flying solo. Build your community, know what to avoid, and be open to different approaches to diversifying your investments.