Networking can feel hard to do
Last night, I was laying in bed at my apartment, contemplating heading to a networking event for real estate investing. I had taken the day off of work to meet with some fellow real estate investors and entrepreneurs during the day. And my introverted self was feeling a little beat down. Watching a little TV, perhaps having a glass of wine, and maybe working on my website a bit sounded like a fantastic idea.
There would be no awkward conversations to try and escape. Nor internal comparison to other investors. And no need to exert so much effort. You know, the myriad of excuses which run through your mind. Often while thinking of heading out the door to work on your business as an introverted individual. But fortunately for me, I was able to get just enough momentum to get out the door and head to the event.
Meeting a celebrity was my motivation
I was able to motivate myself by thinking of two things. Firstly, no one has ever improved their business by staying in their room and watching TV, especially not in the relationship driving the real estate investing world. And second, that Mindy Jensen would be there.
For those that don’t know, Mindy Jensen is the community manager at Bigger Pockets, a live-in house flipper/real estate investor, personal finance blogger, and host of the Bigger Pockets Money Podcast (highly recommended). I’ve really enjoyed the work that she’s put out, and was excited to meet her.
Unfortunately, she was not in attendance at that event, but I’m still really glad that I went. This happens somewhat often. Networking events are often during the evening, and after a long day of work at my 9-5, it can seem like a hassle to make the effort. As soon as I got in the door with a cold beer in my hand, I knew that I’d made the right decision.
Sometimes, you just need to ignore your feelings
Although I’m just getting started in my investing, I love talking about real estate. Furthermore, I’ve met many good friends, business partners, and contacts in the industry by attending these sorts of events. And lastly, it is so important to push outside of your comfort zone and work on those skills which you may not be fantastic at yet.
I’ve also been thinking a lot lately about goal setting, time management, and deciding the right actions to move my business forward. As stated earlier, no empires have been built while watching Netflix. It is important to periodically track your time. Then see if what you’re spending time on is moving you forward in the things that you claim to want to achieve.
Enter Sam, the Evenings Saving Grace
Throughout the course of several hours, and several beers, I met Sam. Sam is a relatively young man with a 9-5 job, a wife, and a very new real estate investing business. But while this business is new, it is massive. Sam claims to have gotten involved seriously in real estate investing about 18 months ago.
Sam’s Story
His story started rather un-remarkably. He and his wife owned property in another state. They then sold it and used the money to buy a property in Denver. After a few years of appreciation through no work of their own, they had a lot of equity. They then did a cash-out-refinance (taking a new bigger loan on the property) to get cash out of the house while continuing to live there. They used a bit of the money to buy a small tri-plex in a rural “suburb” of Denver, which they held as a rental.
But this is where the story takes off. Sam learned of real estate investing, and decided to go right into play with the big boys. He decided to tackle syndication. Syndication is where you pool money from several people to buy a larger property than you could on your own.
Buying the Apartment and Securing the Future
On his first proper deal, Sam purchased a 62-unit apartment building which was poorly managed. The acquisition story was very interesting, and I hope to hear the full story at some point. But based on some of the numbers he gave me, he will be able to increase the value of the property by several million within the first couple of years. He will do this primarily by rehabbing the units, getting market or better rents, and reducing vacancy.
Although I didn’t ask, Sam did not appear to be older than late 20s. And remember, Sam has a full time demanding sales job also. I don’t mention his story to brag on his behalf, but to hopefully inspire you to realize what is possible, think outside of the box, and start taking action. If Sam can pull 2M out of the property in 5 years, he will be able to make a safe withdrawal of $80,000/year, likely forever, without having to work again. In addition to feeling inspired by his story, I also learned several other important facts from our discussion.
Additional Lessons from Sam
- Sam wishes he would have house hacked his first property. Even as his business is starting to take off, he laments the fact that he wasted the opportunity to get started even earlier and stronger. This anecdotally proves just how powerful this strategy can be!
- Depending on the deal structure, Sam could reasonably make over 7-figures in just a few short years. Large multifamily investing, and using other people’s money (OPM) are both powerful means of leverage.
- In discussing how fast someone should scale, he felt that people should go at the pace that they feel comfortable. I would love to be in Sam’s shoes, the owner of a lot of multi-family apartment units, but I know that I am not ready for that yet personally.
I’ll wrap up this post with the following: take action as often as possible to put yourself out there and move forward on your goals. In real estate, that means networking with other investors. The rewards are worth it. And also remember that the sky is the limit. We may not all be Sam, but by moving progressively closer to our goals, early retirement and financial freedom are well within our grasp. Until next time, much success on your journey!
