For Newbies

What Does It Take To Become A Real Estate Investor? (Part Two)

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This is the second part of a series dedicated to those who consider becoming real estate investors – it basically highlights from interviews with successful investors. The focus of this series is about motivated real estate investors making a leap of faith and starting their companies.

To check out part one, follow this link. Without much ado, let’s dive into the second part.

Christian Fautz – Attorney Turned Investor (Episode #16)

Christian is active in the hectic real estate market in Fort Myers, Florida (and the general Southwest Florida area). He has a background as a real estate attorney and now works on house flipping and wholesale deals.

He has a unique real estate investing story to tell because he managed to create a buzz for his business through traditional marketing by publishing a bestseller and getting exposure through TV interviews. Of course, he made the most of it through his website and online marketing. It all started when he met a publisher at his local REI club. On our podcast, he shared how he first got into real estate:

I have a law degree, and while I was in law school I worked for an attorney and he did bankruptcy and landlord tenants. I did a lot of the intake work and I saw people who were facing bankruptcy and their houses were going to be at foreclosure, and I saw that they didn’t seem to have any route or avenue to try to sell their property before it got to that stage. That kind of originally planted the seed with me to get involved in real estate investing and working with distressed sellers.

..I had a background doing real estate law, and then on the side I had gotten involved with some friends who were doing fix and flips back in the late 90’s and we also got involved in buying some non-performing notes from banks where we were just flipping out some of those notes and some of the properties we were cherry picking and keeping those and rehabbing and putting those back on the market, which we weren’t calling fix and flips back then.

..We wanted to make a lifestyle change, being up and hustle, bustle in the New York, New Jersey area, not to mention the cold weather that you have up there in the winter, as we were looking for a sunny location, and we found ourselves gravitated down to southwest Florida, .. we enjoy it and it’s a great market. … the Florida market is booming.

Cassidy Melhorn – Engineer Turned Investor (Episode #19)

Cassidy flips houses in Knoxville, Tennessee. Although he holds an engineering degree, he found that his engineering job stifles his potential.

He is a self-described hustler, with a sharp eye to spot a good investment when he sees one. It’s a trait he picked up from his father, who was a car dealer. In fact, he got through college by flipping calculators, and now he is flipping houses – hundreds of houses, to be specific. The transition from engineering to real estate investing for him was a no brainer. Here is how he recalls the events that lead to him becoming a real estate investor:

I would tell a new investor same thing that I learned from experience and that I would have told myself. You’ve got to start somewhere. I can talk myself out of any deal that I want to. I can find things that are just too much work or I don’t know how to solve that problem, but in order to become an investor, I’ve just got to… I’ve got to pull the trigger on something. 

Even if it’s not the best one, even if it’s not a homerun, if I buy it at a price to where even if I’m close on the margin I’m trying to make, I’ll still walk away with something, and even more valuable than that check at the closing table. Because that experience from actually having done the first deal, because with that comes the confidence to do more deals. I think a lot of people, they kind of psyche themselves out, they get really excited about investing and become overwhelmed because it is relatively difficult to get going, and then maybe throw in the towel before ever really giving it a shot to take hold. Real estate investing has changed my life. I graduated college, I went to work as an engineer, you know, what I thought was my dream job, and we had flipped a couple of the small houses before I had started, and a year and a half in I’m realizing this engineering job, it kind accentuates all of my bad qualities and doesn’t make room for my creativity. ….

I made more money doing real estate investing in Knoxville then I would have made that entire year with my engineering salary. Recognizing that was like, “What am I doing? Why am I wasting time?” There’s that fear there of letting go of what good in pursuit of what’s great. I thought a lot about that, and eventually an opportunity kind of came along that allowed me to exit the engineering career in good graces and do investing full time. I took it. It was a great decision. I’ve done over 150 houses since I started. I kind of switched from doing wholesales to primarily doing renovations.

Andrew Lucas – Hotel Manager Turned Investor (Episode #20)

Andrew was working as a hotel manager in Columbia, the capital city of South Carolina and a college town and he noted the prospect of profits from rental investment properties in that market. He started with one property, and now his company Columbia Cash Buyers manages more than 30 doors. Plus, they occasionally do house flips as well.

He realized that it’s time to dedicate to real estate investing full time once it cost him more money to go to work for other employer than to quit and build his company instead. On our podcast, he shared his experience of getting his first rental property:

So, right out of college, … my roommates and I, we said “You know, we’re going to buy a house and we’re going to rent it out.” …. So I had the first house and I … rented out the rooms to my roommates and stuff so they helped pay the mortgage and I planned to live there for a little while but got another job to open a new hotel. So I moved [away from that place] 10 months later and that was my first full rental.

[Then, there was this]… house across the street, … the older guy passed away or moved to a home or something. The nephew didn’t want the house, so I bought it. You know just accumulated properties for the next …6 [years] or so. Then at that time when I was married, my wife and I decided that we were going to use real estate … to be financially free and have, …cash flow coming besides our jobs.

I had the revenue to replace my income through cash flow rentals. Then, what it ultimately came down to is keeping the full-time job was preventing me from really capitalizing on the flips and the wholesale opportunities. I was flipping houses, .. obviously I wasn’t doing the [rehab]work. I have contractors and things, but having a full-time job we also have 3 kids, all that are 5 and under. Doing all that meant my flips, they were good; they were profitable but we were probably losing you know a couple of thousand dollars every time because I wasn’t there, not as hands-on as I should have been, which, its just what you do when you have a full-time job. So stepping out, going full-time investing, now I can focus on getting more discount properties and then focus on those flips that are going to be a lot more efficient. So it was just costing me money to go to work, which is crazy to say.

David Bokman – Reluctant Corporate Traveler Turned Investor (Episode #21)

David spent two decades in the corporate world before he finally decided to start a real estate investing company and work full time for himself. He used his experience from dealing with corporate clients to lay the foundation of his business. His company, Philly Home Investor had a website, CRM system, social media profiles, and online marketing campaigns (PPC) running from day one.

Philly Home Investor is focused on closing wholesale deals (and an occasional house flip when the numbers are right). They don’t go after residential real estate exclusively – they also pursue commercial multi unit properties and vacant land. David closed 8 deals in his first year (2015) at sales volume of $800k. He went on to 43 deals and sales volume of 9.2 million in his second year, and in his third year he cashed in on 10 million dollars in revenue from 60 closed deals. David also offers consulting services. Here’s what he had to say about his transition from the corporate environment into real estate investing:

… I spent 10 plus years as a medical device rep. So, you know I wore the suit and tie, I drove across the entire East Coast trying to sell products. At the end of the day, I’m working for somebody else. All the travel, all the work, all the stress. That’s what I thought I always wanted to do, but as I’ve gotten older now I have a family, I realize that’s not what I want to do, so I feel like what’s the direction that is going to make me the most amount of money using my skill set, and with the least amount of stress.

I really got involved in real estate by accident, it really just fell on my lap. One day my brother in law …started to share something about wholesaling with me and he sent me this e-book, and … after I finished that e-book, I’ll be honest with you, something kind of just lit a little fire in me, and also at that time I knew that I was leaving my job, so you know, what was I going to do then. This whole wholesaling thing, I really understood it all, and so I started to do a little bit of research. I started to like figure out who are the players in my market, I started going to real estate networks to see the type of people that were trying to do this. Right away I just knew that I could do it better than a lot of the other people that were already doing it.

…When I originally first got involved in real estate I thought I was going to be a flipper, like a lot of people think they’re going to do, and then I really quickly realized that wholesaling is the way to go.. in 30 days I had my first deal and I closed it

Todd Stelnick – Insurance Broker Turned Investor (Episode #31)

Todd is closing every 6th lead he gets in Los Angeles. It’s a market where hundreds of other real estate investors operate, so his success is tremendous. His company, We Buy Houses Los Angeles, does mostly wholesale deals, but also flips houses and manages rental properties.

He has a background as an insurance broker and he considers coaching other real estate investors in the future. Todd was a guest on the REI Marketing Nerds podcast and told us how his wife got him into the industry:

So my wife is Steffanie Stelnick, law office of Steffanie Stelnick, she is a real estate attorney here in Los Angeles. So it actually started off with her, she owns her own business, her own company. She started acquire and get clients that are in this space. So as she was getting clients and after cases would be settled and done then she would talk with me like this case was awesome, they evicted this guy, bought this house cheap, they flipped it, they sold it, made a 100 grand so I started getting intrigued by all these stories that she was sharing with me after she closed their case and I had to jump right into it.

..I told my wife, I got to try this out. I got to do it. So I literally without any hesitation got my site, got things going, started doing direct mail like everybody else did, and then also moved to the internet space. I started getting leads just like everybody else. As soon as I started getting leads then I started to buy houses. She set me up with my own LLC. She set me up with my purchase contracts, my assignment contracts, I could start wholesaling houses …

.. one of her investors took me under their wing and kind of helped me out in coaching. It was a guy that I could just go to and say, “Hey I have this deal, what do you think?”, just reassuring myself. So I had a little bit of a mentor and he also helped me out in learning how to get other investors so I could wholesale houses too.

Anthony Kusky – The Investor With a Degree in Bowling (Episode #82)

Anthony is a real estate investor based in Orlando. His company is called Sky Equities, LLC and it operates along the Orlando Space coast in Central Florida, mostly buying houses to renovate or hold them over a long period of time.

He has been an investor for at least a decade (survived the 2008 housing crash) and has bought and sold over a thousand houses in that period. Even though he started out with properties foreclosed by banks (not houses sold by private owners), he and his team now do typical real estate investing deals. On our show, he reminisced about his first steps in the industry:

Yeah, so living the life and a friend of mine would work these strange hours and different things like that, and kind of say he did this real estate investment. I was curious as to what he did. And so, after a little bit of time, I decided to go [work with him]. He worked for another company at that time, helping sellers, helping the company purchase properties, and so, I went to work with him.

I came to realize the first week I started working there and started training that it wasn’t that he worked weird hours. It was just that he didn’t really work a lot…he wasn’t as motivated as I would have hoped.

[So] I started with another company back in ’04, where they taught me how to analyze properties and run numbers, so we could make sure we’re giving sellers the best offers we could and things like that. And then, in 2006, I had the opportunity to open my own region for them over in Brevard County and was getting set to do that. And, of course, the market started to slow. It started to change a little bit, and the company that I was expanding with decided not to go ahead and proceed with the office and Brevard County, and that’s when I decided to go out on my own and open Sky Equities.

This concludes the second part of the series. More installments to follow so keep an eye, we’ll publish them soon.

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