Meet the Investor: Real Estate Investing Interview with Rehabber Richard Warren

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It is great to have the opportunity to interview someone with a good amount of rehabing experience. With rehabbing being the hottest craze in real estate (condotel investing seems like a close second), many people don’t see the reality behind the craze. Learning from pros like Richard, whose interview you are about to read should be helpful to anyone considering jumping head first into a rehab project.

Note: For rehabbing advice, help, etc. please visit our rehabbing forums.

Meet Investor Richard Warren

How long have you been investing in real estate?
I purchased my first piece of real estate, a condo, in 1985 as my primary residence. I didn’t do another until my first rehab project in the early ‘90s, that was my first investment.

What attracted you to becoming a real estate investor?
My background is in financial planning, I was a CFP or Certified Financial Planner for over 15 years. I did a lot of investment planning and estate planning for some very wealthy people. What I found was that most of them had acquired their wealth one of three ways:

  1. The old fashioned way (my favorite), that is to say that they inherited it.
  2. They had started a business venture that turned out very well.
  3. Investing in real estate.

When I saw how people had achieved great wealth using real estate and the leverage available to acquire it, I became very interested.

Are you a full time or part time investor?
I wouldn’t call it full-time because I have periods with a lot of activity and other times where I’m just not finding the right opportunities. But I don’t have a regular job anymore, I left the “rat race” in June of 2005. I do other forms of investing and I have built a fairly successful network marketing business. However, I take real estate investing very seriously and find in very rewarding both financially and in terms of personal satisfaction.

How did you get started investing?
I needed a place to live but I wanted to buy not rent. I didn’t have much in the way of money so I looked for something on the low end of the market. I lived in Long Island, NY, one of the most expensive areas in the country at the time. I had a lot of construction experience from working in my brothers construction company as a teen so I thought “why not find something I can fix up?” So that started my adventure in rehab.

Tell Us About Your First Deal.
That first deal was a bank REO property that needed a major overhaul. I was in way over my head both financially and in terms of the amount of work required. If it could go wrong it did, termites, leaky roof, electrical problems, plumbing problems, you name it. I quickly understood why no one bought it. In retrospect it turned out to be a great learning experience. The thing that saved me was the fact that this was where I lived not something I was trying to flip quickly. I took my time and went room by room, new bathroom, new kitchen, every room was gutted and redone. I realized how much satisfaction I received from doing this sort of work. This house was where I received my rehabbers education. I learned what to look for and what to watch out for and in spite of everything it was still a profitable deal! May next deal was much better. It was a HUD foreclosure that I purchased for 124k, did about 15k worth of renovation and repair and sold it for 300k. I was on my way.

What is your focus (area of expertise)?
As you’ve figured out by now, I focus on rehab. I live in Las Vegas but the majority of my projects have been in the eastern Nevada town of Ely, which is about 250 miles north of here. The Las Vegas market has appreciated a great deal so the cost of doing a deal here is very high. Ely, on the other hand, is a rehabbers paradise. The area had been in a major economic downturn for so many years that houses were not only being neglected but many were abandoned outright. Fast forward a few years and things are dramatically different. A major copper mine has reopened, not one but two coal-fired power plants are being built to supply electricity to Las Vegas and Reno and a large natural gas and oil field has been discovered to the east. Ely is now a boomtown with a severe housing shortage. I was ahead of the curve on this and was buying as many of these old houses as I could get my hands on. I was able to get most of them using my own cash because they were so low in price. Some I have rehabbed and rented while I have fixed and flipped others. The housing shortage has caused rents to rise significantly and there are still great opportunities here. I’ve purchased houses for 20 to 30 thousand that are now worth 75–100 thousand in less than two years and I am still very bullish on the area.

What do you look for in an investment?
As a rehabber I look for three things, structure, condition and price. If the basic structure is not sound I walk away. Next is the condition, does it need extensive rehab or is it mostly in need of cosmetic improvement? I’m ok with either I just need to factor those things in when considering the profit potential. The last thing is price. I look at the potential sale price, the cost of the project and desired profit. From these numbers I determine the price that I am willing to pay, if I can’t acquire a property at a comfortable price I walk away.

How many deals have you done in your career?
All told, I’ve done about a dozen deals. That isn’t a great number but most of those have come in the last two years. I am very selective and do a lot of my own work. Because I’m doing deals that do not have a high carrying cost I can take my time. I hold most of them long enough to be treated as a capital gain rather than ordinary income. I also hold a property as a rental if the cash flow is better than average. The deals I’ve done that did have a lot of carrying cost I’ve worked to turn around quickly.

Do you have your real estate license?
I do have a real estate license, but I do not act as an agent. I have the license to gain knowledge and access to information. I also have the ability to obtain referral fees by passing deals along.

What advice would you give to a beginning investor?
Don’t be afraid to act, the toughest thing to do is pull the trigger on your first deal. On the other hand don’t be afraid to walk away if it isn’t right. I remember my dad telling me that a once in a lifetime opportunity comes along about once a week, the trick is to recognize it, be open to it and, if appropriate, act on it. Another wise man once said that the best decision is the right decision, the second best decision is the wrong decision and the worst decision is to make no decision at all. As the commercial says, “Just do it!” The only way you will truly learn is by doing, I learned so much more from my mistakes than I ever did from my successes.

What was your toughest deal?
My toughest deal was my first, hands down. I was in so far over my head. You learn from your mistakes so I earned a PhD on that one. Funny thing is, it was still profitable!

What would your dream deal be?
I would love to take a historic building and turn it into apartments or condos. I’m actually looking at such a deal now. I’m not optimistic about getting this particular building on terms favorable enough to make it work but there are plenty of others.

Is there anything else you’d like to share with the rest of us?
Watch the money! Money is probably the biggest issue facing a rehabber. There are plenty of deals out there but loans for rehab projects are very costly and can turn a great deal into a loser very quickly. That’s why I try to do as much as I can using my own cash.

As you’re a rehabber, is there anything you’d like to share about rehabbing?
Watch your emotions, they can cause you a lot of grief. It is very easy to get caught up in the excitement and become overly optimistic about what things will cost and how long they will take. Many people have the rehab fantasy, “I’ll just buy this run down house and fix it up and make a huge profit.” Many people watch shows about rehabbing and flipping houses and think there is nothing to it. Remember that these shows are entertainment and there is a lot that they don’t tell you such as real estate commission or financing costs. A lot of people make a lot of money doing this but many more lose their shirt. Take the time to educate yourself and assess your own ability. Start small and be sure that you have the temperament for rehab before you find yourself in a difficult spot.

Additional Information

The following link is to an article in Realty Times about Ely, NV. The reference in the article to an investor on a roof is me and the gentleman being quoted, Sean Brown, is a friend of mine.

Richard Warren
Rich Kat Properties, LLC
(702) 281-3704
[email protected]

About Author

Joshua Dorkin

Joshua Dorkin is a serial entrepreneur, investor, podcaster, publisher, educator, and co-author of How to Invest in Real Estate. He started BiggerPockets to help democratize the real estate investing landscape for himself and others, aiming to make it accessible for everyone, regardless of income or education. Today, BiggerPockets is the premier real estate investing website online with over one million members and reaching over 70 million people with the message of financial freedom through real estate investing. Joshua, along with his wife and three daughters, make their home in Denver, Colorado, and spend any time they can traveling, exploring, and adventuring. Read more about Joshua’s story in 5280 and


  1. I’m just getting started investing in real estate. I’m not really all that handy so I don’t think I’ll be getting into the rehab business, but I’m looking at the rental business.

    Anyway, a lot of good information here.

  2. Michael Brown JR on

    I need to obtain of list of investors where I can post properties I have for sale. I would like to draw the investors to me so they can buy what we are offering to them. Some have a 39% ROI.

  3. Right on, its not the number of deals but the quality of the deals that is important. I love renovating and know that feeling of accomplishment when it is done. Good luck!!!

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