Stacking it Up

Starting your real estate journey may seem pretty daunting at first. There are so many options to choose from and it seems challenging to figure out the best option for a beginner. On top of all of this, there are real estate experts posting on social media about their massive portfolios with hundreds or even thousands of doors. It is incredibly important to not compare yourself to these people and instead focus on your goals and the path you will take to get there. Personally, I believe that is a path to take that will reduce stress and is pretty simple to follow. This method is called the stack.

Baby Steps

The way you start this method is with one. One you ask? Yes, go out and purchase just one unit. One single family home is a great way to start a portfolio. These properties are very easy to find because they make up most of the market. They’ll show up on Zillow or any other website that shows properties for sale. You are able to get traditional financing for a property like this and it should be easier to manage since there will only be one tenant (or one family) in the unit.

Purchasing one unit, to begin with, is a smart idea because it allows a person to begin to learn about real estate. Through owning this first unit you’ll understand how to manage a tenant, how to pay bills, and how to create an effective system that runs your real estate operation like a well-oiled machine. After some time, you’ll have a great grasp on this real estate thing and will have a nice steady source of income coming in. It is during this time that you will have gained confidence and can move forward and take the next step.

Moving Forward

Now that you understand how real estate works in your own market and have some experience, it’s time to expand. The stack is now under full effect and you begin to look for your next purchase. The difference this time is that now you’re going to look for a small multifamily property with 2 or three units. You already know how to manage one unit so you are well prepared to manage 2-3 more because it really isn’t that different. You find the perfect property, rent it out, and are ready for some more. Now you’ll move on to something larger like a 5 unit. More time goes on and the process repeats. Before you know it, you’ll be purchasing a 20 unit apartment complex.

All of this is very possible through the stack method. Starting out small allows you to dip your toes in the water and get comfortable. Confidence is key in real estate and the stack allows any person to become expert in their market. With each purchase you learn and develop a system that will build a portfolio and get you closer to financial independence. Follow the stack and you will never look back!