Secrets Of Real Estate – From Fix & Flips to Over $200 Million in Multifamily
Investing in real estate is like selecting candies from Bertie Botts Every Flavor Beans – you might think you selected a cherry-flavor candy only to discover it was rotten egg candy. As heartbreaking as it will be to choose the wrong candy flavor, choosing a wrong rental property is always feel worse. The real estate journey is a rough patched road with a lot of ups and downs and especially for someone with no one around to guide, the journey can become even more difficult.
After being inspired by an infomercial to attending a seminar about fix-and-flips, Jacob Blackett, the CEO of SyndicationPro and HoldFolio, now owns 1000+ Multifamily units now but reaching this far wasn’t easy for him too.
Bonus: Tips to manage Real Estate business amidst COVID-19.
Fix and FlipFrom getting inspired by an infomercial about a fix-and-flip seminar to building an investor management portal, journey towards real estate began in the year 2010 as a sophomore in college after being inspired by an infomercial about fix and flip – which mostly involves buying and fixing damaged houses and then selling them off for a better price.
Although we had 5-15 deals a month in our pocket the future investments and projects always remained uncertain, leading us to secure properties in our personal portfolio.
HoldFolioJacob Blackett founded Holdfolio, a platform that connects investors with high-yield investments in the real estate industry, set out with the intention of creating partnerships to profit from income-producing real estate – focused on buying holds.
Single-FamilyWe started off with investments in single-family homes. Complying with our business model, we purchased SF homes and sold around 70% of the ownership to investors and since 30% was with us, I worked for the asset management, as all our property-related issues are handled internally.
Multi-FamilyA couple of years into the real estate industry made us realize that multifamily had more potential than single-family. This made us shift our focus from single-family to multifamily which eventually helped us expand our services to 6 states – Indiana, Ohio, Kentucky, Texas, Florida, and South Carolina.
Tips for Approaching LeadsAs a matter of fact, out of our 7 apartment complexes, 1 came from a broker while the 6 came directly from owners as a victory of our email campaigns and the result of our cold calling. We are very persistent in calling our potential leads, every other month – we were in touch with the owner of our recent purchase for over 2 years.
Criteria for Selecting Properties
- A property with at least 80 units.
- Age of building.
- With value-added components such as central AC.
- Mostly C Class Blue Collar assets.
Market AreaThe key deciding factors to select a market area are:
- Job growth in high-wage sectors.
- Unemployment rate.
- Population growth.
- Diverse Economy.
- Local market conditions.
Lease AuditWe conduct a thorough lease audit – which involves checking the following details in all the leases associated with the property we are purchasing:
- Start Date
- End Date
Deposit Rent, etc.
What are we looking for exactly?
Any discrepancies, like whether or not the lease is matching the rent roll.
Tools We Use
- SyndicationPro – Investor Management Portal.
- Close.io – Inside sales CRM of choice for startups and Small Businesses.
- Zapier – Connects apps and automates workflows.
- Propertyware – User-friendly residential rental property management software for single-family properties.
Characteristics of a Successful Real Estate InvestorAn amazing and successful real estate investor can come from any age group and can have any profession. So, it’s sensible to ask, what exactly makes a successful real estate investor?
- Patience and persistence.
- Thorough understanding of real estate market cycles.
- Networking buff – someone who can build relationships.
- Has the vision to invest in cash flowing buy-and-hold properties.
- Has the ability to remain focussed, even during the time of chaos, and knows what he/she wants.
- Knows how to leverage money, people (skills), and opportunities.
Managing Real Estate Amidst COVID 19Managing Real estate amidst COVID-19 is quite challenging as it involves meeting a lot of new people so shifting in-person meetings to virtual ones was the first thing to do, including introducing virtual property tours.
- Having limited maintenance personnel around to only complete emergency work orders.
- Limiting the office visits, adhering to the “No In-Person” Visits/Tours.
- Changing office hours to 12 p.m-5 p.m as a precautionary measure to minimize exposure.
- Taking necessary precautions as wearing gloves and masks whenever entering the office.
- Rent payments were shifted online via the Tenant Portal, at a First Financial Branch, or via the rental drop box in an unsealed or EasyClose envelope.
- Using digital means of communications as text, email, social media, etc. to give necessary updates to residents.
- Waived application fees to new housing applicants for all properties across the portfolio.
For more COVID-19 tips, check out the podcast…