let’s talk : ONE YEAR DOWN
Good morning!
Today is a big day for us, well maybe just me, but nonetheless it’s important because it marks the ONE YEAR ANNIVERSARY OF LET’S TALK REAL ESTATE. The start of LTRE one year ago marked my exit from the world of finance and my entrance into the craziness of real estate. There are so many words I can come up with to describe that day; exciting, freeing, nervous, hopeful, embarrassed (quitting your brand new job without a steady paycheck lined up is not necessarily a good look and something I struggle with everyday… even one year later) but most importantly the feeling I felt that day was determined. I was determined to create a life I felt I had control over. As I hit this one year mark, I have to tell you, I am nowhere near where I thought I would be. I think that has a lot to do with the manner in which I went about investing but most notably the mindset I had started out with. It was my naiveté I had going into the process that misled me to believe that this was going to be easy. They say “It takes about 10 years to become an overnight success” … I now believe that. So, on that note, let’s reflect, shall we?!
So, as we do, let’s talk Real Estate, let’s talk REAL ESTATE INVESTING – MY FIRST YEAR…
I want to start off by saying this has hands down been the fastest year of my life – is that an age thing?! I’m only 26 for goodness sake time should not be moving this quickly. Anyways, over the past year…
I started this LTRE community to share my learnings with others who have the same interest as I do and to truly hold myself accountable. I am proud to say we have not missed a single week since starting this a year ago!
I teamed up with two business partners to invest with up in Binghamton, acquired a new property or two, and took on the role of acting as a property manager! The biggest win for us this year?! Filling our property we thought to be un-fillable at a “record high” rent – go team!
We put in several offers (we learned not enough!) and had some accepted, some rejected, and ended up walking away from many in the end.
I purchased a TOTAL fixer upper home in Philadelphia, sight unseen… like actually sight unseen, I very literally bought it without seeing it. This may have been the 2nd craziest thing I ever did (behind quitting my job to start this business) but it has been the BIGGEST learning experience. We have been incredibly hands on on this project from start to (almost) finish – we bought it, financed it, hired a construction crew, drafted our own contracts, gutted it, designed plans for the transformation of this single family home into a duplex, made countless trips back and forth between New York City and Philly and are in the process of finishing it up now!
I attempted to teach myself book keeping & accounting for our team!
I took the New York State Real Estate Salesperson course and exams and finally applied to park my license with a brokerage! All documentation has been signed and submitted we are just waiting for the state to make it official! Once I am up and running I cannot wait to share with you why I decided to activate my license and join this specific group. More to come on that in the new year!!
I made so many new connections – whether it be with other investors, lenders, contractors, realtors, wholesalers, etc. – meeting and working with so many people has been great!
I have attempted to explore other avenues of investing (outside of rehabbing and rentals) to no avail. I am not embarrassed to admit this as one of my many “failures” this year.
And finally, I have learned a TON of life and industry lessons (many the hard way). I want to share those with you all. Hopefully you may stumble upon this note and learn from my mistakes so you can avoid them for yourself! Seriously, USE ME AS YOUR TEST DUMMY on this journey to investing so that you can move much faster than I have!
LESSONS LEARNED
ASK LOTS OF QUESTIONS
There is no such thing as a stupid question. Kate Winslet said it perfectly, “Ultimately you have one life to live. You never know unless you try, and you never get anywhere unless you ask”. Over-educate yourself so that you can make informed decisions. There are many opportunities we lost out on or jumped the gun on because we did not ask enough questions from the get go.
ALWAYS DO YOUR OWN RESEARCH
When I first started this venture I assumed that everyone we encountered in this industry had good intentions and because of that I trusted them. I trusted they were telling the truth and knew way better than I did so I took their word for what they were saying / selling / promoting. DO NOT DO THAT. I am not saying be a skeptic but it is important you do your own research so that you can make an educated decision and know what you are getting yourself into. Not doing this all of the time has cost our team $10,000-$15,000 over the past year.
DOCUMENT EVERYTHING
My dad is a lawyer and has always instilled in me the importance of documentation. I carried this into this business as well. Without documentation here you have nothing. Starting a business is absolute madness and without our documentation I would have never remembered why we made 75% of the decisions we did this year. Proper documentation has helped us get out of deals gone wrong, has helped us learn from our mistakes, helped us with our daily operations, and there are probably 1,000 other ways it has helped us that I am not mentioning at the moment, but overall it has made all of our lives that much easier (in my opinion). Just as an example, 9 months into our operation I decided to convert our “accounting system” aka my measly excel spreadsheet, into Quickbooks – without our prior 9 months of documentation this would have been a complete nightmare.
BE APPRECIATIVE OF EVERYONE YOU WORK WITH
We have worked with a ton of people in just 12 short months. Many times in real estate, I am finding you work with people for hours / days / months and neither party may make any money out of it. In my opinion, and our team’s opinion for sure, it is super important to make sure those people still feel appreciated and as though their hard work did not go unnoticed. If we work with you – this is our public THANK YOU (seriously). Do not worry, we sent more personal thank you’s as well – but truly, we want to make it known that we appreciate everyone we worth with.
NETWORK, NETWORK, NETWORK
Similar to any other industry, connections are EVERYTHING. Everyone is looking for the best realtor, contractor, lender, etc. Building an extensive network so that you can not only help yourself but also others is invaluable.
LEARN THE LOCAL LAWS
This lesson is very much a work in progress for me still. I am learning something new almost everyday and have been investing in both of these cities for the past 6-12 months. For example, did you know that in Binghamton, NY you cannot be an out of town investor without a local property manager? Did you know that in Philadelphia, PA in order to conduct business you need a Commercial Activity License? But BEFORE you can apply for a Commercial Activity License you need a separate City of Philadelphia Business Tax ID? Did you know the difference between Zoning and Use Registration before last week’s blog post? I DIDN’T! These are just a SMALL handful of the local laws I have become familiar with over the past year in the cities in which we operate and I know I still have A TON more to learn on this. Not knowing these laws has cost us time and definitely some money.
MAKE WAY TOO MANY OFFERS
In my experience, you will have to make A TON of offers to grow in this business. Do not be afraid to make more than one offer at a time. We (I) definitely struggled with this. It felt uneasy, unnatural and scary (financially) BUT if you structure your contracts correctly, you will always have an exit plan if need be! Seriously, I can’t even count how many offers we made this year that never panned out. Goal for 2019 – get way more aggressive on sending out offers!
FACETIME
While we absolutely live in a virtual world, sometimes I believe it is just necessary to show your face. We were having a ton of repairs done on a property up in Binghamton and at the end I went up there to do a walk through and check out the work. While I was there I met the contractor who did all of the repairs as well as some of the tenants. As their new landlord, I got to learn a bit more about them and put a face to their names. We made it a priority to listen to their requests and walk them through all of the work we had done to fix up the property in order to demonstrate that we care about the place they currently call home. On the flip side, they also got to see who we were, and that we were also human beings and not just a personality behind a keyboard asking them to pay rent. I truly believe, and hope, that this encounter was beneficial for all of us!
DIVERSIFY
Do not put all of your eggs in one basket! I cannot tell you how guilty I was of this this year – and on many different occasions too! Like I knew I shouldn’t do this and yet I KEPT DOING IT. I would end up losing months of time spent on three separate deals that we lost at the closing table.
ALMOST NOTHING WILL GO ACCORDING TO PLAN
There will always be hiccups and roadblocks along the way! I used to approach these hiccups with tears and a glass of wine (or two) but NOW I use them as a learning experience. I seriously do appreciate them now – I am not just saying that. If you do not make an effort to embrace the challenges in a calm and practical manner you will drive yourself absolutely crazy.
OUTSOURCE & WORK WITH EXPERTS
You cannot do everything yourself – hiring and learning from a professional is way more efficient and will lead to better results. I did not do this well this year but it is something I am definitely going to work on going into 2019. I want to be way more efficient than I was in 2018, and I believe in order to do that, I will need to learn from the professionals!
SO WHAT ARE MY GOALS FOR 2019?!
BE MORE AGGRESSIVE
DIVERSIFY
WORK SMARTER NOT HARDER … Okay, I promise I will still work hard 🙂 … I just hope to work better!
IN CONCLUSION
It has been a crazy year but I want to end this week’s post by saying THANK YOU. Thank you for reading this, thank you for supporting me and most importantly, thank you for being a member of the LTRE community. I may have a long way to go but I am so beyond grateful for this past year and opportunity. Please let me know if there is anything you dislike, like, love, want to see more of on LTRE? This is a totally open community and I hope for it to be beneficial for all of us! THANK YOU!
Feel free to comment on the blog post HERE and let us know what YOU think!
Happy Wednesday!
Erin
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Me – this is also based on my own personal experience!
