Investing Takes A Team

In early December, we lucked into our second investment property. Ashley is always saying I have a big mouth, and she would know, as we share a bed and three kids. This time though, my big mouth paid off, because, due to my big mouth anybody who’s ever spent three minutes and seven seconds with me knows I buy rental houses. If nothing else, it’s a pretty inexpensive marketing strategy.

Turns out marketing is among my few skills in this business, so I wanted to share a bit about what it’s like to be the least handy man in Nebraska, the Midwest, and likely the Continental United States. In an ironic turn of events, Ashley is the handiest person most of us will ever meet. She said to me just last weekend she regretted hiring contractors to fix the electrical and install the kitchen cabinets and sink.

She said if she had it to do over again, she’d have done all the work herself except for the iron waste pipe we needed replaced. Being a money-mouth, she ran conduit, replaced outlets, light fixtures, replaced boxes, painted (rolled, brushed, sprayed), laid drywall, mudded, sanded, laid flooring and transition strips, replaced closet rollers, hung doors, and I’m either forgetting more or choosing to move on for pacing’s sake.

This could be a really short reflection on renovation that concludes, “and that’s why it takes a team of two!” but the truth is, to do this business right, it takes a team of more. And my hope is by letting you behind the curtain, you can see a little better how it works for new investors.

Team Member One

Our first team member was my real estate agent, Jay: in this case, not in the traditional sense. Even though he didn’t help us buy the property he may have been the most important member of my team because before he said the magic words, “This is a really good deal,” Ashley was terrified of the 60-yards of waste, and the dog-poop-cigarette-smoke-mouse-infested-carpenter-ant-infused odor that permeated the place. Jay’s stamp of approval allowed us to be the core team of two that moved through the process.

Team Member Two

Your community will be the biggest influence on what you spend and how well the work gets done. I joined the Omaha Real Estate Meetup about a year ago. I’ve largely been silent on the Facebook page, but I try to contribute when able. Nevertheless, they are an invaluable resource to find all things investing. No book I’ve read, and no podcast I’ve listened to has come close to the value I’ve gotten from the Omaha Real Estate Meetup. Chris taught me the velocity banking strategy that enabled me to have $46,000 saved to buy the property I bought, and he introduced me to the banker who sold me the investment product I needed.

Satyam introduced me to Eloy and Elena, who took my property’s bathroom from disaster to masterpiece. In addition, Eloy hung our new exterior doors and offered pro tips to Ashley who many days worked the same shift rehabbing other rooms in the house.

I found All Star Plumbing though the Omaha Real Estate Meetup too. They did so much work on the house, and did it so well, and even the couple of problems that persisted after they finished work, they fixed without charging extra. If one company has more integrity, I’d be hard-pressed to find them.

Team Member Three

Tenants are often overlooked in this process, but I feel they shouldn’t be. When you’ve put tens of thousands into a property, spent months rehabbing it to livable condition, and brought it to the precipice of cash flow, the wrong tenant can put a bad turn on the ending. Prior to this property, Zillow had never charged me to list a property for rent. This time, they charged ten bucks for a one-week listing.

I also posted the house on Facebook Marketplace. In terms of overall traffic, I saw a ton more from Facebook, as much as ten-to-one. We had the property listed for six days before I selected a couple to sign a one-year lease. The applicants came from Zillow, one of only ten to reach out via that post.

Leads on Zillow nearly dried up after the first four days. Facebook lasted the entire time, with only a small slowdown on the sixth day.

The bottom line is, because my best lead came from Zillow, I felt the ten-dollar charge was worthwhile, but I’d be tempted to try a week with Facebook only next time. Just so long as the tenant I select is respectful, has a clean background, and a positive outlook. They are the ones who will be caring for your investment the longest.

Life Changer

If you’ve ventured into real estate investing, it can be one of the most rewarding journeys of your life, and it can be among the most exhausting. Ashley phrased it best when she said, “Most people don’t do this because it’s so hard, and that’s why the people who do make such good money.”

I couldn’t say it better, which makes her better at everything. What can I say? I’m glad to have a business partner who’s so talented, and if you don’t have one of your own, find one before you venture out. More than any other team member, your business partner will define the success you do or don’t have in the future.

Finally, even if you’re more like Ashley, and less like me, at least question your urge to DIY. Our project was rented on February 23rd, sixty days after we bought it. If Ashley had tackled all the work herself, we would have held the property for at least 30 more days, resulting in the loss of a month’s rent, the eating of a month’s vacant insurance premium, and utilities. Perhaps dollar for dollar it would’ve been a wash (I doubt it), but if nothing else, time is our most valuable commodity. Don’t waste it. Build a team.