The Biggest Mistake I Made as a New Investor (& How You Can Avoid It)

The Biggest Mistake I Made as a New Investor (& How You Can Avoid It)

1 min read
Sterling White

Sterling White is a multifamily investor, specializing in value-add apartments in Indianapolis and other Midwestern markets. With just under a decade of experience in the real estate industry, Sterling was involved with the management of over $10MM in capital, which is deployed across a $18.9MM real estate portfolio made up of multifamily apartments. Through the company he founded, Sonder Investment Group, he owns just under 400 units.

Experience
Sterling is a seasoned real estate investor, philanthropist, speaker, host, mentor, and former world record attemptee, who was born and raised in Indianapolis. He is the author of the renowned book From Zero to 400 Units and the host of a phenomenal podcast, which hit the No. 1 spot on The Real Estate Experience Podcast‘s list of best shows in the investing category.

Living and breathing real estate since 2009, Sterling currently owns multiple businesses related to real estate, including Sterling White Enterprises, Sonder Investment Group, and other investment partnerships. Throughout the span of a decade, he has contributed to helping others become successful in the real estate industry. In addition, he has been directly involved with both buying and selling over 100 single family homes.

Sterling’s primary specialities include sales, marketing, crowdfunding, buy and hold investing, investment properties, and many more.

He was featured on the BiggerPockets Podcast episode #308 and has been contributing content to BiggerPockets since 2014, with over 200 posts on topics ranging from single family investing and apartment investing to mindset and scaling a business online. He has been featured on multiple other podcasts, too.

When he isn’t immersed in the real world, Sterling likes reading motivational books, including Maverick Mindset by Doug Hall, As a Man Thinketh by James Allen, and Sell or Be Sold by Grant Cardone.

As a thrill-seeker with an evident fear of heights, he somehow managed to jump off of a 65-foot cliff into deep water without flinching. (Okay, maybe a little bit…) Sterling is also an avid kale-eating traveller, but nothing is more important to him than family. His unusual habit is bird-watching, which he discovered he truly enjoyed during an Ornithology class from his college days.

Education
Sterling attended the University of Indianapolis.

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The biggest mistake I made as a new investor was not hiring a property management company. When I purchased my first single-family home, I had no idea the amount of work that came with it.

As you may have heard, tenants can be a headache. They aren’t all troublesome, but most of them can be. Yes, a management company charges a fee from the gross rent, but the peace of mind it gives you is worth the money and time. You can always make more money — but not more time.

Distancing Yourself

I once told a tenant to feel free to call me. That was a very bad idea. Every little thing that happened, I got a call. Most of the calls were outside the realm of my management of the property. In fact, they were usually personal matters. I do not have time to be a shrink for tenants. This is why it’s good to have a property management company.

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Related: The 6 Most Common Mistakes New Investors Make (Including Thinking It’s Easy!)

Being an investor, an owner, and a property manager generally proves too many hats to wear. Now that I have a management company, I can just oversee them and delegate tasks to them. That way, I can focus less on micromanaging the properties I already own and more time purchasing new properties. Focusing on higher value activities is what drives business.

Other People’s Problems

Some people actually enjoy being involved in other people’s crises, and often those people make good property managers. They actually want to hear about their tenants’ problems. To them, it’s like watching a talk show. I am not one of those people. I love investing, but that does not include hearing about why your cousin’s dog destroyed the carpet in your guest room. Or how your nephew doesn’t have a job. Or how your sister is dating the wrong guy again.

Related: The Rookie Landlording Mistake Most New Investors Make

Investors invest. Property managers manage properties. That requires solving the everyday issues that occur on a property, which necessitates having the time to listen to tenants’ problems.

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[Editor’s Note: We are republishing this article to help out our newer readers.]

Investors: Do you hire out management for your properties? Why or why not?

Let me know with a comment!