{"id":129604,"date":"2020-09-23T15:00:28","date_gmt":"2020-09-23T21:00:28","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=129604"},"modified":"2021-03-16T17:03:07","modified_gmt":"2021-03-16T23:03:07","slug":"investor-spotlighttom-shallcross","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/investor-spotlighttom-shallcross","title":{"rendered":"Investor Spotlight: 20 Doors in 2 Years with Tom Shallcross"},"content":{"rendered":"

In two years, BiggerPockets Pro member Tom Shallcross<\/a> accumulated a 20-plus-unit portfolio. He’s also doing a handful of flips each year… while maintaining his W-2 job. His goal? Developing a smart investment strategy that increases his net worth\u2014and provides security for his family.<\/em><\/strong><\/p>\n

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Before real estate, I served as vice president of sales for a technology consultancy. I’ve been able to maintain my W-2 job while accumulating a 20-plus unit portfolio over a two-year period\u2014and performing four to eight high-end flips per year.<\/p>\n

Real estate investing has opened my eyes to a whole new way to leverage money, increase my net worth, and work in a team environment. I can’t think of another part of my life\u2014except maybe high school football or some actual sport\u2014where your team has such a direct impact on your outcome.<\/p>\n

Preferred investing strategy<\/strong>: Buy and hold and fix and flip<\/p>\n

Starting funds<\/strong>: $200,000<\/p>\n

First deal<\/strong>: Private lending on a small single-family home<\/p>\n

Deals to date<\/strong>: 35<\/p>\n

Most important part of a<\/strong> deal<\/strong>: It’s not an either\/or, but if you make me pick one important element, I choose equity spread. “How can I increase my net worth?” is the question I’m constantly asking.<\/p>\n

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Successful investing requires accurate, easy-to-understand information about your properties and the markets you invest in. BPInsights gives you the information you need to find your next great deal and maximize your current investments\u2014from expert analysis to proprietary data sets. Start leveling up your investments today<\/a>.<\/em><\/p>\n

The Beginning<\/h2>\n

I was originally a passive investor for a local flipper. After seeing some of his profits, I wanted to get more active. My research led me to BiggerPockets\u2014which helped me focus on building a small rental portfolio.<\/p>\n

I have four kids, and I don’t ever want to have time or money be an obstacle to the life I want to live with them. The money from real estate is important and great, but it’s basically just a tool to create time, experience, and well-being.<\/p>\n

Since 2018, I’ve scaled very quickly and accumulated over 20 doors<\/a>, all leveraging the BRRRR method. We are also on pace to exit seven successful flips in 2020. I’ve been able to do this while maintaining a full-time job and being a present father for my four kids because I’ve developed smart systems. My partner also helps me gain back time.<\/p>\n

My Current Plans<\/h2>\n

My team continues to do four to eight higher-end flips per year, and I now have two virtual assistants working under me to make calls and handle administrative tasks.<\/p>\n

While we will continue to flip on the North Side of Chicago, I am no longer interested in single-family home rentals. Instead, I’m looking to scale up into multifamily properties in specific areas. Mark Ainley and I have also started The Straight Up Chicago Investor Podcast<\/a>. If you enjoy the BiggerPockets podcasts<\/a>, consider checking us out: We’ve shared several guests. It helps increase my local exposure, too.<\/p>\n

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Photo credit: GC Realty Development LLC<\/em><\/figcaption><\/figure>\n

How I Evaluate Properties<\/h2>\n

For flips, I’m always looking at minimum profit numbers. If my minimums are met, I use the 75% rule for both purchase and rehab\u2014for example, a $300,000 purchase requiring $150,000 in rehab needs to sell for $600,000.<\/p>\n

I don’t follow the 70% rule because I include the purchase and rehab. Also, these are higher-end properties, so I can still make a good profit at 75%. I also know the area and my process, which mitigates risk.<\/p>\n

For rentals, I compare market value, my equity spread and ability to pull out cash, cash flow, and, lastly, the internal rate of return for a conservative, five-year projection.<\/p>\n

On an intangible note, I ask, “Is this deal better than 70% of the deals I’ve done?” I also ask, “Will I be happy with this deal in 10 years?”<\/p>\n

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Deal Diary: A tiny Qualified Opportunity Fund in Chicago<\/a><\/h3>\n

When Tom<\/em><\/strong> purchased this three-unit in Chicago\u2019s historic Pullman neighborhood, he leveraged unrealized capital gains from a previous sale to create one of the smallest Qualified Opportunity Funds out there. The key to success\u2014and a 35% IRR? A strong team and decisive action.<\/em><\/strong><\/p>\n

Learn how Tom pulled off this impressive deal at BPInsights<\/a>\u2014available for BiggerPockets Pro members only. Upgrade your account today<\/a>.<\/p><\/blockquote>\n

Red Flags<\/h2>\n