I have been writing these weekly updates for over a month now and I have to say that I am really enjoying it. There have been a few times that I would rather just sit down on a Sunday and relax as opposed to writing a recap of the week but this has been very helpful for me. Reflecting on what you have accomplished in the short, medium, and long term will certainly ensure that your business or personal life is on track. If it’s not, these short term updates give you the ability to make a small course correction to get it back on the right trajectory to hit those longer term goals. If you are running a business or setting goals in your personal life, I suggest you take some time each week to take a step back and write down what you have accomplished. You may be surprised at how much you actually got done, or vice versa.
This week was focused around building relationships and networking, getting solid funding in place for upcoming projects, and tweaking the lead system when the phones started ringing.
Building Relationships and Networking
This week I put together a meet up that was advertised on Bigger Pockets for other local real estate investors. I have been trying to do this ever since moving here last April but I have just always found excuses not to do it. So, this time I just committed to a date and time and forced my schedule to make it work. I didn’t even care if I was the only one there; I was going to set the time aside to make it. Fortunately, I was not the only one there and we had a very good turnout. There were about 10 other local investors who showed up ranging from Alabama to Destin, some of which I already knew and others I hadn’t met before. Getting together like this is a great way to help each other and get the message across to other investors that we are here to work together instead of always being in competition. I am happy to share (most of) what I am doing with everyone else to help them become successful as well. It will pay off in the long run when we turn to each other to help on a deal or come up with a solution for one that went south. Who knows, there may be buyers there for my properties or sellers there who I can buy properties from.
Along the networking front, I was interviewed for another podcast this week. I was shocked to have been on this particular podcast and I look forward to sharing the link when it comes out in a few weeks. This is a great way to get my story out there and hopefully bring in some more readers and followers of my journey this year. Additionally, I hope to inspire some other military folks or friends/family to jump into real estate investing as well. I already have a few people who have converted over to the dark side! The water is nice, come on in…
I had a few meetings this week with commercial lenders in an attempt to raise some low cost money for upcoming projects. Being a new company, coupled with the short term holding of assets, it can be challenging to find bank (read low cost) funding for flips. However, that isn’t going to stop me from trying. I spoke to some local portfolio lenders to see if they would have an appetite for investing in renovation projects as long as I had some skin in the game. If you don’t know, a portfolio lender is typically referred to as a lender who keeps their loans in house by lending out their own money. This is more along the lines of relationship lending and asset based lending coupled with credit and payment history. I was hoping to find someone who would lend at approximately 80% of the purchase price and 100% of the repair costs. Obviously this kind of funding could only be used on projects where I am not in a rush to close on the house. Bank financing like this will typically take 45 days or so due to all the hoops I would need to jump through with the biggest time suck being the appraisal. I am also looking into an unsecured business line of credit but believe it or not, banks really want to secure their money with something. That is hard to do when you are dealing with a business that wants to hold everything for as short as possible and doesn’t really want to own anything. “Control everything, own nothing.” Anyone know who said that? I’ll give you a hint, it was a brilliant and very wealthy businessman. Unfortunately Google has taken all the mystery out of things these days…
Tweaking the Marketing Machine
I’m not going to get into this too much but the phone starting ringing this week. And since this is my first mailing with my full time lead manager and our upgraded CRM, there will certainly be growing pains. My goal was to stress the machine to the point that it breaks and although it didn’t break, there were some tweaks that needed to be made. This will be an iterative process, updating things along the way until the system is firing on all cylinders. I will dedicate a single blog post to marketing in the future for those who are interested.
Other Miscellaneous Items
- The headache house that I have been representing the buyers on for the last 4 months finally closed this week. That reduced my stress level about 50% and made me sleep a little better at night. Finally! They will be doing a full renovation on the house and I can’t wait to see what it looks like when they are finished. Better yet, I will not be involved in the renovation!
- Renovations on the Auction House started this week. Demo is completed and the rough electrical is going in. This coming week the whole house will be painted and then flooring will go in. This project should be completed and on the market around the end of this month.
- The price reduction that I requested on the Maze House was accepted so that house will go to closing sometime between the end of Feb and end of March. My next step will be to finalize the funding for that project (see bankers above or find other lending options).
- I got everything in one folder for my 2015 taxes. I have said it before but a lot of you will likely be shocked that I have been doing my own taxes since about 1998. I have some old ones in my filing cabinet that were hand written 1040 EZs. But, you will also be happy to know that I have finally given that up to a local CPA for my 2015 taxes. It felt nice to hand it all over and leave it, although I do have an urge to do them myself as well to see what the difference is. Someone please talk me out of that!!
- Lastly, I analyzed over 100 properties this week for purchase. I am dedicated to buying a lot of houses this year and that is only going to happen if I make a lot of offers and aggressively go after them. This is where most of my time is spent these days and rightfully so. The acquisition is where real estate investors make their money, ever hear the saying “you make your money when you buy”? There is no truer statement in this business.
I was also at home all weekend with my 20 month old son so I got to spend a lot of time playing with him and just being Dad. I truly enjoyed that and I can’t wait until I can spend more time with him in the future. That is the “why” of real estate investing for me, to be truly independent and spend more time being at home and being “present” with my family. I am home a lot now but I am not always “present” since a lot of times my mind is on the business or my full time job in the Navy. It won’t be long and that will all change, I am truly looking forward to that.
Thanks for reading and like always, please leave a comment or share this article on Facebook or LinkedIn if you know someone who may like it. And see if you can tell me who that quote is from without “Googling It.” For next week, expect some before photos of the Filled in Pool House and maybe some during photos of the Auction House.