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Turnkey Real Estate Investing

3 min read

Questions You Should Ask an Advisor Before Expanding Your Portfolio

Thu, Aug 10, 2023

Two women in conversation

Portfolio expansion is a necessary step to building passive wealth. Multiple properties and several streams of cash flow are par for the course. Expanding, however, isn’t as easy as hitting Zillow and finding an attractive property to buy! Investors set themselves up for success with careful planning, risk mitigation…and consulting their portfolio advisor!

When you’re ready to expand, what do you need to know? What should you prioritize?

Here are the key questions worth asking so you can move forward with clarity, assurance, and facts on your side!

7 Questions to Ask About a Potential Addition to Your Portfolio

"What's the current state of the real estate market?"

Before you expand your portfolio, you must establish where the market is and its trajectory. After all, this can significantly impact where you should invest! Markets that were once affordable or investor hotspots may not be now. Your advisor can help you assess the challenges of today’s real estate market and how you can pivot for a strategic advantage. From here, you can identify the right markets to invest in and the types of properties worth purchasing.

"How will a new property fit in with the rest of my portfolio?"

Investors aren’t after any property. They’re after the right property. Part of finding the right property is contextualizing it through the lens of your existing portfolio. What purpose does it serve? What are your goals for that individual property and your portfolio overall? Your advisor can help you identify gaps and opportunities so any future acquisitions maximize your wealth-building potential while limiting risk exposure.

"Will this add diversification to my portfolio?"

Diversification in a real estate portfolio protects you from risks on two levels: local risk factors and financial risk factors. On the general level, diversification protects your portfolio should a property be impacted by a localized natural disaster, economic downturn, or other obstacles that threaten the rentability of your property.

Owning multiple properties also limits the impact of vacancies, repairs, or other property problems resulting in cash flow loss. Other properties pick up the slack and keep your passive income from falling into the red.

Ask your advisor if the risk factors facing a potential property are limited and different from your other properties.

"How can I accurately assess potential profitability and cash flow?"

Before you buy a property, you need to know its cash flow potential. What can you rent it for? What are ongoing costs and expenses? How exactly does your advisor calculate these numbers?

They should help you see the potential – and potential problems – in any property you consider. Understanding how they get to their conclusions is key.

"Based on my assets, is now a good time to expand?"

Though expanding your portfolio is essential for building long-term passive wealth, you must do so carefully. Growing too much too quickly without the proper resources and safety nets in place can put you in a precarious financial position. Investors need to take stock of their assets alongside their advisors. They’ll be able to help you see if you can acquire more houses without jeopardizing your existing properties or hard-earned money.

They can also help you see if you should hold off and dedicate more time to refining your existing properties and making them as efficient and profitable as possible!

"What are my options for including this addition to my estate planning?"

Investors ought to consider each investment property’s role in their estate. Who would you leave it to? Do you need to add this property to your will or trust? What are the implications of these different strategies? Investing in real estate, after all, isn’t just about generating passive income in the present. It’s about establishing lasting, generational wealth that you get to pass down!

"What financing options are the best fit for this property acquisition?"

While most real estate investors will defer to traditional financing – utilizing leverage via a lender – there are other ways to do it. Some investors like to pay in cash. Others want to move around assets. Your advisor can help you determine if there are opportunities for tax-advantaged strategies, like a 1031 Exchange. These must be planned well before buying or selling a property, so talk early and often!

Let your advisor show you the best financing options for your current portfolio and circumstances.


At REI Nation, we make it easy to purchase the right property at the right time with the right team.

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Chris Clothier
Written by Chris Clothier

Entrepreneur, writer, speaker, ultra-endurance athlete, husband & father of five beautiful children. Chris puts these natural talents on display every day. As a partner at REI Nation, Chris addresses small and large audiences of real estate investors and business professionals nationwide several times each year. Chris is also an active writer, weekly publishing real estate, leadership, and endurance training articles.