The end of the year marks an important threshold. 2019 brought forth significant growth and success. While you should embrace the positive changes which took place during the past year, it is important to examine the flaws in our investment strategies. In what areas can you improve to maximize your returns and ultimately grow your investments?
Using the new year as a chance to make financial resolutions is an important factor to reevaluate your overall goals.
During 2020, consider these 10 New Years resolutions for investors, so you can get the most value for your money.
10 New Years Resolutions for Investors
1. Set a goal to diversify your portfolio
Many of our clients have all their eggs in one basket, the real estate industry. Maybe they have a handful of fix-and-flip properties that they are rehabbing and seeking to sell for a greater return in due time. The problem we see time and time again is when you have all your investments tied up with an unstable industry, you increase your chance of getting hit hard in the event of a recession or economic fall. By diversifying your portfolio you can start incorporating investments that potentially thrive in an economic decline. Note investors had some of the most profitable years during the 2008 recession as it is not necessarily dependent on a thriving economy. Note investing also provides higher ROI’s than traditional real estate investing AND less hands on involvement. Your portfolio will love you for making the switch.
2. Set a goal to reduce overhead expenses
Reducing the “middle-men” as part an investment purchase will reduce the unnecessary expenses and fees associated with that investment. A specific example is purchasing bank direct distressed mortgages. The further you are removed from the bank that originated the delinquent mortgage, essentially the higher the price point you will be paying for the note. The more is has been circulated around the marketplace means there are more companies that have their arms wrapped around the files. Being able to get yourself closest to the bank selling loans, delinquent loans, or even re-performing loans will allow you to capture a wholesale price point – or as close to a wholesale price point as possible. At Revolve Capital Group, we purchase bank direct distressed mortgages directly from Top Tier 1 banks and sell these same loans to our investors.
3. Set a goal to increase profitability
All investors have (or should have) a goal to increase their profits, because why else do we invest if not to grow our profits? We focus on key services that ultimately help our current and potential clients grow their portfolios. We offer bank direct assets acquired directly from Tier 1 Banks, provide access to national vendors so our investors can successfully manage their own nation-wide portfolios from the comfort fo their home/office, and include completed due diligence for each loan at no additional cost. While there are many firms you can invest with, the key services each company has to offer are what will increase your overall profitability.
4. Set a goal to establish a long-term strategy
The fact is, most investment categories offer few exit strategies which lacks diversity in crafting a detailed and strategic play. Investing in notes provides several exit-options so you can fine-tune a plan that fits your immediate, short-term and long-term goals. Are you seeking a passive income stream? Do you prefer quick capital growth? Would you like to circulate your investments? These are questions you can ask yourself to establish a goal and satisfy your investment criteria. When you purchase notes, you become the “bank”, and the sky is the limit because you do not have traditional or expected rules to follow allowing utilization of a creative personalized approach.
5. Set a goal to create a passive income streams
The majority of our clients were previously landlords. Like those clients, most landlords choose that income stream because of the monthly residual passive profits that trickle into the bank account. However, with those benefits also comes much risk. You are legally bound to providing a healthy living environment for your renters, you are required to have your property insured, you take the late-night phone calls that the water heater is broken, you communicate with the tenant as to why they were unable to pay utilities that month, you are on the hook for property taxes, etc. We prefer taking a much less hands-on approach, by choosing to act as the “lienlord” instead. Being a leinlord allows you to take on investments that you can own for the next 30 years while the homeowner continually makes payments, but all the property condition concerns fall on the shoulders of the homeowner. Because you are now “the bank” you can control the terms and interest rates, and by utilizing a national vendor you can remove yourself from the majority of those responsibilities and you can focus on your monthly passive income.
6. Set a goal to stop wasting time
Mark Cuban is a self made billionaire. If anybody knows the value of time, it’s him. Cuban himself stated “I can make things happen more quickly by paying a little bit more, and that’s important, because time is the one asset you can’t own, buy or get back.” Money can buy you anything, except time. It is the one thing you cannot buy. If you want to grow your investments, you need to stop wasting time on tasks you can delegate to firms and professionals. Simply put, having an extended nationwide network of vendors allows you to scale your business, increase your profit margin and become a more passive investor. It is beneficial to familiarize yourself with what roll the servicer plays in managing your assets, so you can feel comfortable focusing on other aspects of your business.
7. Set a goal to increase ROI
If you watch shows like Million Dollar Listing or Flip or Flop, you might notice investors paying .80 or .90 cents on the dollar for their investment properties, which comes with all the glitz and the glamour.
Instead, you could learn to purchase deals we are selling nationwide on a consistent basis for .50 or .60 cents on the dollar. For example, we just had a deal worth $140,000 and it’s on the market now for $90,000. That’s .60 cents on the dollar. Why would you go out and pay $120,000 or $130,000 for that exact same property?
Our question is… What is your ROI?
8. Set a goal to get educated
Any entrepreneur will tell you that knowledge is power. By educating yourself you can set yourself up for success and growth in any area you desire. To start educating yourself, look no further than our blog page. Our blogs are geared towards investors seeking extended education, and we consistently post to make sure you are as well informed as possible. Our aim is to stay up to speed on market trends that will be pivotal to continue expanding your portfolio. Another key factor in getting educated is by attending seminars. We frequently sponsor industry leading conferences that provide opportunity for continuing professional education. The next conference we will be speaking at is the IMN NPL Notes Servicing Forum, East in Fort Lauderdale, FL. https://www.revcapgroup.com/imn-npl-notes-servicing-forum-east/
9. Set a goal to expand your social network
Typically a persons comfort level starts and ends with those they know and trust. A closed network limits our exposure to people who can offer new connections and ideas. A strong network supports and advocates for you, and allows you to maximize opportunity. By networking with other investors/vendors/firms you can earn trust and create a long-standing relationship. We understand how important these relationships are, and we offer key services that provide the foundation of a long term business partnership. Transparency, consistency of product, safe purchases, clean collateral and post-close asset management are all important building blocks for our client relationships. Each stage of the process, from product selection through post-close, we work with you every step of the way. By creating a long-term relationship, we ensure success for you and us both.
10. Set a goal to market your real estate investments
At the present time, it has never been easier to expand your reach allowing thousands, if not millions, of eyes to see your available inventory. Connect with new and willing buyers, increase exposure and market your properties by utilizing digital technologies. Announcing an investment opportunity for sale has never been easier than now thanks to the wonderful world of social media.
Make your New Years Resolutions Stick
It is said that in order to make a New Years resolution really stick, you need to keep your goals realistic. Fortunately for you, the same ecosystems we have in place for our company is offered to our investors which ensure the goals are realistic and completely doable. By incorporating the above 10 New Years resolutions for investors into your 2020 goals you can make it your most successful year yet.