Mentorship, Partnership and Flipping

The Dream

As a teenager, I spent summer's watching my father do contract work in homes and buildings. Admiring his ability to create. Taking an image on paper and bringing it to life. That was him, mechanically inclined to solve problems and get things done through skill and resourcefulness.

There were days we would ride through the suburbs of Cleveland looking, almost studying older homes for improvements and renovations. Ryan, "see that house its old and congested. In a market like this, it needs another bedroom to sell. And I would open the kitchen up by taking this wall out and converting that garage into a master suite with walk-in closets and bathroom. The bathroom would be easy since the other bathroom is right up against that wall the plumbing could tie in easily. And, put up a pole barn in the backyard" (this dude grew up in the city, but as much as he talked about pole barns, you would think he grew up on a farm).

Initially, it was hard for me to follow but as time went on, I understood how his mind was working, and I began creating my visions and ideas on how I would upgrade a home so much, I fell in love with admiring older homes. Watching HGTV for long periods of the day, I grew so much appreciation for remodeling and DIY work; I hated the idea of purchasing a brand new home (I've changed since). But, I always knew I wasn't my dad, I don't have all the unique gifts he does, I was blessed with his vision but not his natural handy and mechanical skill. So I dreamed of one day combining his skills with my skill for organization and sound business decision making. And I just knew that would be the path to me getting rich.

My Reality

Fast forward to 2015; I just arrived back in my hometown Cleveland. While I lived in another city, I was still keeping up with Cleveland home prices, always having the ability to find a deal and constantly saying to myself "If I lived in Cleveland, I would jump on this deal" and never doing it. But I was back and again I was catching the deals, but this time I had no excuses. It was time to check myself. I had to get mentally right, and I wasn't.

Up until my first flip, I was super risk adverse and the king of the hedge. When I say hedge, I meant if I am in a risky situation, I always had a backup plan to protect myself. In the case of flipping a home, I build this criterion that I told myself I would not buck no matter what.

My plan was either to buy a multi-family home and rent out the other portion to cover the mortgage. Or my other plan was to purchase a home in a suburb of Cleveland, and I was very specific on acceptable suburbs, and try to flip that property, and if it didn't work out, I would just live in it. So this was where I was mentally. I got my plan, and I was sticking to it. I didn't have a goal, a deadline, or an action item to start my plan (I've learned that's a mistake). I was basically playing when the deal comes my way; I'll jump on it. At the end of 2015, I had not bought an investment property; I did move with my family and say, I'll get the house where we can live together and rent it out in the future. It was a passive way of me lying to myself that I was pursuing my dream.

Couple months later, I meet up with some talented fellas, and we decided to go out to celebrate Ron moving to Columbus. I rarely go out, once every month or so, just the fact I decided to go out was kind of weird. So we're out enjoying ourselves, and I see a friend from high school. We're cool, so I get to talking with him he has a lot of impressive things going on with travel and NBA work. He asks me what's up and I say the usual family, kids, corporate grind, blah blah blah type deal.

Anybody that knows me intimately knows how I don't share much and when I've checked out. So just before I'm about to check out, I genuinely ask how his twin brother Brad was doing and with a real excitement in his voice, he said his Brad was into real estate property management. I heard the word "real" and I was checked back in. So I said, "He's into real estate, I'm about to start investing more." My friend said, "well he's into property management, but he's doing great things on the investment side too." I told him I needed to link up with him. This was the passive Ryan, I said it but a part of me knew I would not follow-up immediately. My friend sensed that as well. He gave me Brad's number and told me to text him. Alright cool, bet (still passive Ryan). He sensed it as well, he told me to text Brad right now at 1:30 in the morning which I did...

Fast Forward. Brad and I chopped it. When I initially contacted Brad, I just imagined him putting me on the game. Telling what to look out for, what to stay away from but Brad mentioned a partnership almost immediately. I push backed in my mind because a strong partnership is rooted in it being complimentary, meaning where one is weak the other is strong. In my mind, the perfect partnership was with my father. I would do the numbers and business and leave my dad to worry about the contracting work. But Brad, I initially saw as me in a way, not the 'get dirty and do the work' but more numbers and business. Brad had insight though and relationships. We worked out the details of how our potential project would work together like roles, expectations, target areas and splits. Each of us would be in a somewhat learning stage, but Brad had one up on me because of his background in Property Management, he understood how to run real estate projects and had reliable contractors and mentors...

The mentors were key. Brad's two mentors are heavy in the Cleveland Flipping scene. I understood the power of the relationship from my experience in Healthcare and it being much of the reason for the success I've had so far. I met up with one, Riccole, and he shocked me and offered to show us the game, not for a fee, but in the form of a partnership. Brad and I's original plan or Plan A included only us working the project and maybe buying a house off one of his mentors. But Riccole's offer made us think twice, I liked the insurance that Riccole was a contractor by trade and could fix anything on the house if money began to get tight for the project. The setup was Brad and I bring half of the money to the table for a flip on a property, Riccole had just purchased. We left Plan A and went with Riccole's offer. He actually let us shop through his property inventory on which project we wanted to take. We selected, and we started down the path. We split the cost between each side; I kept a detailed journal of progress, financials and budget. Brad acted as the project manager, purchasing materials, securing the contractors and Riccole was the ultimate oversight. The issues we encountered he had solutions immediately with his experience flipping more than 200 homes.

Act

You have to act before you're totally ready. I'm not saying don't prepare, but at some point, you reach a place of necessary action. Some people call this making the leap of faith. Steve Harvey wrote an entire book on this calling it Jump. Well, it's true you have to leap, jump and act before you're totally ready in your mind because in truth, you're waiting for the perfect time and it will never come because it doesn't exist. The time is now.

In my situation, surrounding myself with people with the same or bigger goals and ambition was crucial. Brad gave me the necessary push to jump in the investment game. Everything didn't initially go perfect, I wasn't always sure how I was going to finance the flip, but resourcefulness got Brad and I started on our project together. So jump if you're contemplating chasing a real estate investing dream or any dream for that matter. Once the jump happens, it will force you to make it work; it will force you to be resourceful to get things done. "When humans are faced with either success or failure, life or death, in most cases, success is the end result."

Risk

I dreamed big. I talked about becoming rich through real estate. I fanaticized about cutting deals and being a big business man. But I never accounted for the cost. You have to pay the cost to be the boss. You have to put something up if you want more. I was risk adverse; I wanted the big money output with little money input. This is possible, and I have seen it happen for people, but I've now seen more happen for people that are willing to go out and risk more; whether it be time, pride, or money. When I transferred $10,000 to Brad for the first installment, I thought I would be shaken, but I felt alive and ready.

The project kicked off and everything far as fixing it went very smoothly, we had couple items to get right after the expectation but nothing major. We went over budget only by $1,000 which was a win for me. I hoped for the best and planned for the worst. I budgeted for an overage of $5,000 (I didn't disclose this to Brad) and gave myself a runaway of 6-8 months for completion of the project. Brad and Rico planned to flip everything in 2 months. That didn't happen, though.

The house was complete and ready to go, we received an offer within the first month of completion that would have put us in the green. Brad and I decided to decline the offer and wait for a sweeter deal. We got greedy. That offer didn't come for another two months, and it wasn't that much higher, and because of the wasted time, it ended up reducing my profit. But it was a success; I took the profit, ready to throw it right back into the next project.

A side note, I leave a lot of detail out about the process. It’s very systematic and Riccole has processes for fixing and selling the houses that would have to be covered in extensive detail.

Partnership

Reflecting on my experience, the biggest lesson learned is the power of partnership and mentorship. The partnership gave me the push necessary to make the leap. I entrenched myself in the investment and real estate community through relationships and partnerships formed. The first networking meetings I attended, I walked through the door with Brad. Easing the nervousness about what I was walking into, Brad gave me access to his mentors, and in turn, one became my mentor. That same mentor became my first business partner. When looking to make entry or learn, focus on relationships and relationship that can birth partnerships.

It also opened my eyes to minimizing risk and accelerating the learning curve for a beginner to any field or new journey. Growing up, I hated group projects because it was enviable that a slacker would exist in the group and someone would be left carrying more weight. But in business, we're all adults, have real conversations setting roles and expectations, and you can protect yourself the pitfalls of group work and take full advantage of the benefits of spreading the work.

I want to encourage anyone thinking about jumping into real estate investing to do it. If you’re dreaming of the possibilities and have a vision, act on it. Do the personal development, prepare yourself mentally and believe that it's truly possible because it is. While your preparing personally and mentally, study and do the research. We live in a world now with almost no limits because information is easily accessible through the traditional sources of books but also Google and YouTube changing the game. And last put an action plan in place, in this plan from my experience I would advise to include and prioritize relationship building and being open to partnership. Learn together, grow together, and build together.

https://thetalented6.com/inspiration/2016/11/18/flipping-and-lessons-learned