Pivoting in Real Estate: Considerations for Your Investment Strategy

Real estate is a dynamic field. The ability to adapt is often the line between a resilient investor and one who struggles.

Real estate isn't static, and neither should your approach be. It's like sailing; you've got to adjust your sails to the ever-changing winds.   

The Need for Pivoting

Markets evolve, trends shift, and external factors like economic changes or global events can impact your investments. Today is certainly not the first time in history that the markets have experienced challenges and it won't be the last. So when should you consider changing your strategy?

Market Signals

Your first clue often comes from the market itself. Keep an eye on key indicators, such as rising or falling property values, demand trends, and vacancy rates. If your current strategy isn't performing as expected due to market changes, it might be time to reassess.

The good thing about investing during a crisis is that many others turn away from the opportunity to purchase out of concerns over uncertainty.  This can provide opportunities for deals you didn't expect to come your way.  A good deal, as long as evaluated properly, is still a good deal.  As the saying goes, the best time to buy real estate was yesterday.  The second best time is now.  Ultimately, the best time is when you've found the right property and the numbers work.

Financial Evaluation

Your investment strategy should align with your financial goals and your plan. If your objectives shift - maybe you're looking for faster returns or long-term stability - your strategy should follow suit. 

Regularly evaluate your financial position and adjust accordingly.  Ensure you have enough liquidity to handle expenses should you have non-paying tenants or other unexpected costs come up.

Risk Mitigation

Diversification is an investor's best friend. If your current strategy is overly concentrated in a particular property type or location, it might be time to pivot and spread your risk with different types of investments.  If you've been primarily investing in single-family homes in a specific city and the market conditions have changed, you might consider multi-unit properties or looking at different cities, depending on your research. 

Diversification isn't about abandoning your initial strategy entirely; it's about creating a safety net and spreading your risk across various avenues within the real estate market. It's an effective way to adapt to changing market conditions and ensure your investment success in the long run.

Research and Education

The more you know, the better equipped you are to pivot intelligently. Study the market, learn about different real estate investment models, and stay updated with industry trends.  Look for investment areas with the greatest growth.  This knowledge will be your compass when you decide to change course.

Networking and Expert Guidance

Connect with experienced investors and industry experts. Discussing your situation with others who've been there can provide valuable insights. A mentor or coach can also offer guidance and help you navigate the transition.

Engaging with fellow investors offers unique insights. Consider joining a real estate mastermind group or forming an informal real estate investment group. Sharing experiences, discussing challenges, and brainstorming ideas with peers can provide fresh perspectives and practical advice. These connections can not only enhance your understanding of the market but also give you the confidence to pivot when needed.

Drawing from the collective wisdom of the real estate investment community and learning from the successes and challenges of others can make your own pivot smoother and more successful. In real estate, a well-informed decision is often the key to long-term prosperity.

Small Steps and Testing

Consider making gradual changes to your strategy rather than an abrupt shift. This allows you to test the waters while minimizing risks. For example, if you've primarily been involved in long-term hold residential properties, you might start exploring furnished mid-term rentals.

Your ability to pivot your strategy when needed can be the difference between overcoming challenges and feeling stuck. Keep your finger on the pulse of the market, regularly evaluate your financial goals, and be open to change. Remember, it's not about flipping your strategy on a whim but about steering your ship towards your investment goals. Stay flexible, stay informed, and may your real estate ventures always sail smoothly!

Make Confident Decisions with the Support of Your Own Team

Making decisions in uncertain times can be difficult when you're going it alone.  The Investors Network Community (INC) Mastermind Program is where your own personal "Board of Directors" will help you chart or pivot on your course.

Each group of 5-7 members meets consistently to support one another’s dreams and plans, brainstorm new ideas, share resources and most importantly, provide accountability so you stay on track. Being a member of this tight-knit group is a great way to make good investment decisions and continue to grow as an investor as well as become more personally fulfilled. 

If you would like to learn more about the INC Mastermind Program, feel free to contact Katy who can answer your questions so you can see if it's a good fit for you.

A Mastermind group is one of the most valuable additions for your toolbox to help you achieve the life of your dreams.

Katy Fleming, Director can be reached by email at success@fleming2u.com.