How To Shift From A Real Estate Professional To Investor

If you’re working in real estate as a broker, analyst, or property manager, you might be thinking about becoming an investor. When carrying out multiple roles, you’ll want to think about the pros and cons related to your options. In some cases, you may want to do both, such as being a service provider and also investing, which we’ll look at in the next article.

Before making the shift, you’ll want to make sure you’re prepared and are ready to take the leap. If you have the Insider’s Edge, you’ll be able to use your knowledge and connections to strive toward the next stage.

Follow these steps if you’re in the real estate industry and are considering becoming an investor.

Build on Professional Expertise

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One of the greatest advantages of transitioning from professional to investor is the wealth of industry knowledge you already possess. As a real estate professional, you are likely aware of market trends and recent transaction data. The firsthand experience you have can be used toward evaluating your own deal. You might be able to identify opportunities that others could overlook.

When I interviewed Stephen Palmese, CEO of Integritas Capital, on my podcast, “The Insider’s Edge to Real Estate Investing,” he spoke of working in brokerage and then investing. By drawing on his reputation of being consistent and carrying through on what he said, Stephen was able to make the leap successfully.

Start Small

You might think about acquiring a single rental property or a small multifamily building, which will allow you to apply your professional expertise while gaining hands-on experience in ownership. Managing a small portfolio helps you refine skills like tenant relations, budgeting, and operational efficiency without taking on too many responsibilities. You can also test different investment strategies to see what’s right for you. I cover ways to specializing in one niche in my book, “The Insider’s Edge to Real Estate Investing.”

Leverage Your Network

One of the most valuable assets you bring to investing is your professional network. Brokers often have access to off-market opportunities, while property managers might know of underperforming buildings with potential for repositioning. These relationships can provide access to deals that align with your investment goals. Additionally, the trust and credibility you’ve built in the industry can open doors to partnerships and financing opportunities. A solid reputation makes it easier to attract collaborators and secure the resources needed to expand your portfolio.

Deepen Your Financial Knowledge

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While real estate professionals often work with basic metrics like cap rates and rental yields, successful investors often need a greater understanding of financial analysis. You’ll want to evaluate cash flow projections, financing structures, and returns to make informed decisions. You can acquire these skills or bring someone onto your team to help with the financial details.

Balance Career and Investments

Many real estate professionals begin their investment journey while maintaining full-time jobs. This approach provides financial stability and allows you to take measured steps into the world of investing. By balancing your career with small, manageable investments, you can learn and adapt, and expand your portfolio over time.

Manage Risk

Whether it’s market fluctuations, unexpected maintenance costs, or tenant turnover, every investment comes with challenges. Successful investors learn to identify risks early and develop strategies to mitigate them. You can carry out thorough due diligence and build an A-level team to manage risk. This can help you to have a proactive approach and be ready to handle issues that might arise.

Stay Persistent

You likely learned the importance of perseverance when you entered the real estate industry. While you may face some setbacks while shifting into the investment side, you can draw on the skills of showing up every day and being persistent. This can help you work through the different nuances that might come up as you evaluate a property, or delays that you could face while repositioning a building.

Transitioning from a real estate professional to an investor can turn into an opportunity to leverage your industry expertise, network, and persistence to build long-term financial success. By starting with manageable investments, expanding your financial knowledge, and leaning into the relationships and reputation you’ve cultivated, you’ll be well equipped to navigate the challenges of investing. With your Insider’s Edge and a proactive approach, you can take the leap toward owning and growing a successful real estate portfolio.