What Are Your 5 Major Moves?

[Andrew Jambor]

Hi Everyone!

I invest in college rentals and am looking to grow my portfolio. My partners and I currently own 2 2-Families and 3 Single families in our market with goals to reach 35 properties in 5 years. I would like to know from those of you who have acquired many properties what were the 5 major moves that made the most difference in being able to acquire these properties? 

Any feedback is appreciated!

Thank you

[Erik W.]

My 5 major moves are the Mashed Potato, the Twist, the YMCA, the Macerena, and the Cha Cha Slide.  *grins

The biggest decision I had to make early on was how to finance the deals. Use debt, my own cash, or to use private capital once my funding ran dry. This can be a game changer. I think private capital is the ideal method. By this, I mean equity partners. When I win, they win. When I lose, they lose. It's not like with a bank where I can lose and they still win because they get to repo my property. Also, smart equity partners off valuable insight and a second, third, fourth, etc. set of eyes on the project, which a bank usually won't. Banks cut checks based on LTV most times, but beyond that you don't get the hard-won wisdom of veteran investors helping you evaluate deals in ways that will interest them in participating.

Another key task was outsourcing.  After I got past 12 units, it became next to impossible to keep up with cleaning, so that was the first thing to be hired out.  Hint: do not hire your wife or girlfriend.  Lawn mowing was next.  Even though we only had three duplexes at the time, it was still a chore considering I still work a day job.  Maintenance was 3rd.  As a friend of mine says, "To grow and be profitable, you have to take the tools out of the trunk."  Wise words.

Next came automation. I do as much as possible online. I don't answer my phone (shocking!). Everything goes to voicemail where a recording tells the person what needs to happen if they want to view a property, sell a property, report a maintenance issue, etc. This cuts down on tons of wasted time. A VA is another option here if you insist on having a voice on the other end, but really how hard is it to record something that says, "If you'd like to view a property or request maintenance, visit our website at xyz.com/showing or xyz.com/maintenance for fast and friendly service!"

Fourth was networking.  I did this a little bit at the start, but never got serious until about 8 years in.  I learned so much from folks in the trenches already...what to do and what NOT to do.  Also, you hear ideas that generate more ideas.  Many are pie-in-the-sky or won't fit my style, but the few that are good are usually very profitable and more than makes up for the time investment.

My last big move just came in 2020: we've moved into strictly commercial acquisitions.  I really enjoy the creativity and ways to make money with commercial.  To be clear, we aren't doing retail, though.  Storage units and workshops with land that is zoned for pretty much anything we can think of.  Costs a bit more to play in this field, but far less hassle and the potential upside of improving rents for the right kind of property are excellent.