4-Phase Portfolio

Building the 4-Phase Portfolio blends a property and market selection strategy into the overall management of your real estate portfolio. Our clients subscribe to the traditional buy and hold strategy of real estate – with a twist.

The twist:  To maximize the performance of your real estate holdings you should buy and hold, you just should not buy and hold the same properties in the same cities the entire life of your real estate portfolio.

Enter: Portfolio Compression which is an active and dynamic re-leveraging of your non-performing real estate assets. By managing your ongoing portfolio performance, using the right property types for their intended purposes and by building the 4-Phase Portfolio, you will maximize your real estate wealth and cash flow.

The phases of real estate portfolio planning: 

Phase I Create A Real Estate Plan

This phase of your investment real estate portfolio planning process is considered an active step.  It is the point at which you determine your roadmap and plot your course from A to Z. 

Phase II Grow Equity

The second phase of the investment real estate portfolio planning process is considered a passive phase where your real estate purchases are timed in capture market demand as demand is outpacing supply and your portfolio is passively working for you. 

Phase III Compound Growth

Phase III of the investment real estate portfolio planning process is based on actively re-leveraging your growing equity into additional growth markets by selling in one city, using a 1031 tax deferred exchange and reinvesting in additional cities by timing the real estate cycle.

Phase IV Convert Equity to Cash Flow

The final phase of completing your investment real estate portfolio is to convert your equity to cash flow.  By building equity first and then converting to cash flow, the true potential to achieve income replacing cash flow is enhanced.  The conversion of equity to cash flow is accomplished through the sale of residential real estate holdings (equity building real estate) using a 1031 tax deferred exchange and the acquisition of commercial real estate holdings (income producing real estate) with higher net operating income.

As you move through the four phases of real estate portfolio planning, it is important to remember that this is not a single four step process. Most investors will cycle through Phase I through Phase III several times in order to build equity before converting to cash flow. Once equity is converted to cash flow, the process may simply be started again with Phase I. 

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