All Forum Posts by: Dave Van Horn

I’ve said this many times but if I had to sum it up in a word, it would be: Leverage.

At first it was leveraging capital, even with credit cards in the very beginning, to purchase more properties. (*Note* I’m not so sure I would use this exact strategy the same way again since this was before there was high cash advance fees) but the point still stands with available lending. This enabled me to buy more houses than I ever could with just my own cash and scale my portfolio. Though I could only grow so much in a silo.

So then, it was leveraging my network. I did this by joining my local REIA meetings to find deals and find sources of more money to accommodate those deals.

But then, I realized, I could only meet so many people this way. And I eventually learned it wasn’t about who I know but who knows me. So I leveraged my network in a new way through Thought Leadership with both writing about my past experience and participating at speaking events across the country. This in turn only created a bigger network for both deal flow and capital.

And lastly, on that note, it was leveraging knowledge. And not just my own as a thought leader to attract things my business needed but it was leveraging knowledge of others to grow. This has been done with the help of a coach. In fact, many coaches. Eventually my company outgrew me and the operations that came with it. Utilizing a coach that specializes in an operation system (in our case we used “Scaling Up”) to not only track progress/outcomes, but to strategize, develop leadership within our organization, and drive accountability/alignment amongst the staff - all of which seriously accelerated our company’s growth and enabled us to scale.

If it were me, I would probably do these two strategies.

I would start looking for deals and purchase an option on a property then flip the contract (i.e. wholesaling).

Lease Options would be another strategy that makes sense here. This is where I'd rent a property with the option to buy it and then turn it around, lease it to someone else (giving them the option to buy from me). I did this once where I rented a property that included a $1000 deposit down, and the rent was $700. I turned around and got a $3,000 deposit on a 2 year rent-to-own and rented it for $950/month. So I was cashflowing $250 per month and made a couple grand off the bat, all without owning. I even had it put in the lease that any repairs over $300, the original owner covered it, and anything under $300 were covered by this rent-to-own tenant. Looking back, I wish I did this with more properties!

First thing I should say is...There's no bad properties, just bad prices! I've seen people get their best deals with structural damage for example (though I still usually avoid those).

But environmental/toxic stuff I'd probably try to stay away from. Things like underground oil tanks (and the spills they can cause), asbestos removal, etc.

Older steel septic tanks can be an issue too. Not only is the replacement itself expensive but the work to dig it out and to tap into the newer system.

@Aaryan Patel

I second the recommendations for Burke's book and Fairless' book! I know it's not a book but I also think Whitney Sewell's podcast has a wealth of information for what you're looking for.

Easy: when it's not giving me back my time and only taking it.

Or in another words, when I get tired of it all lol

Unless it's the flip side, where the other major condition occurs which is where I "exit".

In many ways, I've already left RE investing as I've gotten older by selling much of my personal SFR portfolio. I've learned over the years time is much more important than anything and there's ways to position yourself into real estate deals (like as a Limited Partner as one example) where you might make a little less in profit but you make much more in time. Accumulating more free time is the goal, at least for me at this stage, not necessarily more assets.

Economics, legislation, etc doesn't bother me. There's almost always a workaround. Not to mention plenty of asset classes in the sea.

Hi @Mia Crampton, hope you enjoy the book! Wish I had more time to mentor myself these days, but if you ever have any specific questions, feel free to reach out directly.

Depends on the asset class of course but in addition to much of the above I'd also add eviction timelines for the area which varies by county, average days on market for rentals and sales (tells you if its a buyers or sellers market), median income of the area (i.e. how many people can afford the rent in this location), the ratio of rental properties vs. owner occupied, and new construction starts (this can definitely be a leading indicator for a growing or declining area - 6 months either way can probably tell you this).

@Malcomb Stapel Thanks for the mention! Yeah I was around back then and still here :)

First I would say: There are usury laws in certain states, so I would double check that in NY since it could become problematic down the line.

As an investor holding paper, I'm usually doing interest only that's a couple points higher than the going rate which keeps their payment lower, the cashflow higher, then they would pay off the principle when they refi or sell the property. The average person keeps a mortgage 5-7 years anyway and the "interest only" component reduces the relevance of the higher rate. Plus it keeps the buyer incentivized to sell or refi.

@Chris Allen

I like Brandon's idea in spirit but I don't fully agree with it which more has to do with it being a "pay down debt vs. invest the equity" argument (and that's a whole other can of worms!).

But I think a different way of looking at it is providing a safe, quality upbringing vs planning for the unknown too much. I'd like to think its more about becoming financially free yourself first as the breadwinner and then preserving that wealth so you're capable to provide what's necessary as it comes up.

It took me longer than I expected but I tried to focus on what I could do in the immediate short term: getting my kids the best education we had access to (which required moving) and then instead of socking away money we couldn't touch, I started a business and built a portfolio.

And of course you can show them financial literacy along the way. Better to teach a man to fish to feed them for a lifetime, as they say.