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How To Diversify Your Portfolio With Real Estate Investing In CA

How to Diversify Your Portfolio With Real Estate Investing CAIf there’s one piece of advice you’re guaranteed to hear from investing gurus, it’s this: Don’t put all your eggs in one basket. And that is, indeed, sound advice – even though those gurus tend to call it “investment allocation” or “diversification.” The chief reason for this is so your basket won’t fall to the ground and all the eggs get broken.

Or it’s a good way to mitigate risk – that is, minimizing the impact of not-so-good assets in your portfolio so that overall and over the long haul you come out ahead. Let’s look then at how to diversify your portfolio with real estate investing in CA.

Rental Properties

Investing in rental properties is an excellent way diversify your real estate investment portfolio. It’s an easy way to get started, and it assures you of a monthly cash flow in collected rents. And that cash flow is highly important for beginning investors. If the monthly rents exceed mortgage payments and other expenses like taxes and insurance, you’re guaranteed at least a little profit and ROI.

Fix and Flip Properties

Another popular real estate investing strategy is buying, rehabbing, and then re-selling house. The risk here is greater, but so is the quick profit potential. The other drawback is that the longer you hold the property (if, for example, the market takes a downtown and you have trouble selling), the less money you ultimately make because you’ll be paying on the mortgage longer. But, again, that’s the whole point of diversification – to mitigate such risk.

Multifamily Properties

If you’re a more experienced investor wondering how to diversify your portfolio with real estate investing in CA, you might consider multifamily properties like apartments. The benefits of diversifying with multifamily properties, also known as multi-dwelling units (MDUs), are significant and include greater cash flow, risk reduction, and scalability.

A huge benefit of multifamily properties is that a single investment can yield a very good cash flow in multiple rents, providing passive income and possible financial freedom. There can also be less risk because some or most units will always be occupied, so a few vacancies won’t be as devastating as a vacancy in a single-family dwelling. In addition, there’s the opportunity for scalability because you can often continue to acquire properties/units within a single building.

Commercial Properties

Another diversification possibility for even more advanced investors is commercial properties. This involves purchasing properties and then leasing individual units to businesses. While the income potential is good, it’s a complicated process and there’s a good deal of attendant risk. It also takes a huge investment up front that is out of reach for many real estate investors.

One of the great benefits is that there is generally far less competition because it’s complex and outside many investors’ comfort zone. Another huge benefit is the potential for safe and assured cash flow. Leases for commercial real estate are usually for much longer periods than residential rental contracts/leases, so recurring vacancies aren’t a concern and the cash flow is fairly consistent. And commercial properties usually yield a much better ROI, generally around 6% to 12%, than residential properties, which yield 1% to 4% on average.

Investing in real estate can definitely be a solid investment strategy, especially if you learn how to diversify your portfolio with real estate investing in CA. Just keep in mind your current situation and expertise level in your diversification efforts. And we would welcome the opportunity to help you achieve your real estate investing goals.



Broker/Realtor/Investor/Mentor (41 years experience) Specialties: Buyer's Agent, Listing Agent, Foreclosure, Short-Sale, Property Management, Landlord I'm a Full Time Real Estate Professional, house flipper and mentor to many of my clients. I am here to help you get top dollar for your home or get you the best price for a home that you are going to live in. I have over 40 years of real estate experience for you to draw on and actively list and sell over 20 homes a year. I have sold over 600+ homes in the last ten years alone. I am a very skillful negotiator and will work diligently to help you realize the best possible price when buying or selling your home. With my Exclusive Home Acquisition & Sales System, I can find the Right Home for You! I have access to homes no other Realtor will show you. I can show you how to save an average of $10,000.00 on the purchase price. We will find a home that fits your needs, in a neighborhood that suits your style. If you are selling your home then I can bring all the professionals to you. I always include professional photos in ALL my listings. I have contractors standing by to assist with those upgrades if needed. I can also quickly get you ALL CASH offers for your home if you desire. My marketing surpasses all other agents. It begins with extensive internet advertising to hundreds of websites throughout the world. I do direct mail marketing for you home and also knock on doors in your neighborhood when I am holding an open house. I hold you home open to expose it to as many buyers as possible. My Exclusive program is designed to sell your home for Top Dollar in Any market. I am an experienced flipper here in Orange County and therefore can offer you my over 40 years of real estate experience. The information is available to you at no charge! If you like what you see, please call me and setup Your Free Consultation.

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