Having a Real Estate Portfolio Roadmap Can Help Investors Identify and Visually Communicate Their Vision.
What is a Real Estate Portfolio Roadmap?
A real estate portfolio roadmap (REPF) is a top-down view of your future real estate holdings that you desire to accumulate over the life of your investment career. The roadmap begins as an idea, becomes a plan of action, the steps needed to reach your end goal – the accumulation of real estate – and works as a punch list throughout your journey.
Because of the difficult nature of real estate transactions, namely their many interrelated pieces, the timeframes presented on this type of roadmap are more like aspirational guide posts rather that steadfast directionals or exacting deadlines.
Your REPR is a working, evolving document. It’s goal is to lay the foundation to reverse engineer your investment agenda over the next five, ten, fifteen, or twenty years.
Do I Need a Real Estate Portfolio Roadmap?
For the novice private investor, a REPR outlines a specific growth path to follow which can help move you towards your end goal faster and with less surprises.
For the investment team, such as a REIT, it moves all stakeholders in the same direction, at the same rhythm, helping them achieve their business objectives with more clarity and synchronicity.
Moreover, using a real estate portfolio roadmap does all of the following:
Communicates investment impact
Guides the investor (or investment team) along the journey
Creates the initiative to forecast future income & expenses for each investment project (deal)
Assists the project manager in forecasting required resources for specific initiatives
Bolsters accountability, and
Tracks milestones and progress
Develop a Real Estate Investment Portfolio Vision.
Ask yourself, “how much money do I want to net in retirement?”
Talk to other investors, bankers, and real estate brokers to learn about income and expenses for any given investment.
Create your investor dream team, which includes an accountant, a lawyer, a banker, and a real estate broker.
Decide on your internal management team. (Are you a solopreneur or an entrepreneur?)
Create Your First Draft Picks – a ‘Bird’s-Eye’ View of Your Real Estate Investment Portfolio Over the Span of Your Career (the roadmap).
The private investor or management team should brainstorm investment options to meet the investment portfolio vision.
Identify specific purchase initiatives, cost estimates, and management (holding) expenses.
Decide on how to best structure each deal, taking into account the availability of investment and working capital, funding, tax implications, legal, government restrictions, and internal level of priority.
Create an Internal Investment Roadmap.
Start with your first purchase objective. Walk through the entire transaction to identify and document all of the potential moving pieces, costs, timing, potential pitfalls, risk reduction strategies, management duties & expenses, and BTCF.
Decide who will be the project manager for the first undertaking (and each project thereafter).
Hire your ‘dream team’ and ask your real estate broker to “shop the market.”
Implement your plan!
Rinse & repeat!
As your portfolio grows, so will your ability to scale up small projects or take on bigger projects. Thus, your roadmap will undoubtedly be edited several times throughout your career.
Remember, not even “…the best laid plans of mice and men” ever happen perfectly. Be flexible. And, above all, enjoy the journey!
In closing, if you want to be (or already are) a real estate investor who has several properties in mind, then you should create a REPR. It will help you to organize, evaluate, prioritize, forecast, track, and communicate your investment initiatives throughout your investment journey.
As a real estate broker, my team and I want to help you understand our markets and identify potential investment opportunities for you. We want to become your ‘go-to’ real estate consultant, “your source for real estate investment solutions!”