2016 Has Been The Best of My 3 Short Years in REI
Hey BP Community,
I've been kinda absent from the site this year, but its been a busy year for me and I wanted to share these updates in hopes of maybe inspiring someone, especially some of the newer investors because I know sometimes in the beginning things can seem sort of hopeless at times in this business, and can be very discouraging. I've written about how I got started in this business in the past, so I wont take the time in going back through all of that again (just check some of my earlier posts). I did get started in REI by purchasing my first flip in Homewood, IL with a couple of my friends back in 1/2014, and let me say that was nothing short of a disaster! We clearly weren't ready, but we jumped in head first into that project with the hopes of learning a lot and maybe making some money in the process. In short, that did'nt happen quite the way we hoped, but I can say it was very instrumental in bringing me to the point I am at today. That one deal educated me in so many ways, and it also introduced me into the world of wholesaling. I took a deal that was going terribly wrong and losing us money each month, and I took that situation and turned it around to net a $3k check on my first deal (partners ended up backing out). Wasn't the $30k I was expecting to make, but that $3k inspired me and its value was more then any dollar amount could've meant to me at the time. Since that transaction, I made the decision that I would focus exclusively on wholesaling, learning how to market to find off-market deals, learning how to identify a true "deal", and I also made the decision to get my real estate license. From that point, lets fast forward a little.....
Here's the check from my first deal. I ended up netting $3k after reimbursing carrying costs and some other expenses:
Since that time in my career almost 3yrs to todays date, I have ran several marketing campaigns, applying some of the great information that I received via podcasts, books, networking, etc. From those campaigns I have done several successful transactions, I have lost money on some deals that didn't go the way planned, but overall things have been heading in a positive direction and the experiences have taught me more then I would have ever imagined! Me getting my real estate license has taught me so much and has been such a valuable tool with me being in this business. I am still learning daily, but my wholesaling business has come a long way. I used to hear people talking about selling their deals via text messages to their buyers and I used to think, "Man, that has to be amazing! I can't wait until I get to that point!" Well, I am at that point. I rarely have to market my deals to my cash buyers list, which is over 700 names of people I really don't even know. I have about 5 serious buyers that purchase every deal that I bring them. Over the years they have seen how diligent I am when it comes to working my business, they noticed my professionalism and consistency, and we have built some great relationships since we have been working together. My only problem is them getting mad at me sometimes for not giving them some of the good deals I send to my other guys lol (not a bad problem to have).
The beginning of this year I decided it was time for me to get back in the ring and try out rehabbing once again. I figured I had been building my confidence from the last experience and I was ready to take a shot at it again. I still had my construction company that I had been doing smaller rehab jobs and filling a lot of work orders for a couple of out of state clients I had who had lots of rentals on the south side that always had work orders coming in from their property management companies. I had been focusing on this to help me get better at managing contractors, managing projects, and building my relationships that I had with the contractors that I worked with. I ended up finding a good crew that I had been working with and with them, I felt it was time to take on another project. A couple of investors reached out to me to GC a rehab project on the south side of the city in the Greater Grand Crossing Area. It was a bigger project so I was kind of hesitant, but my crew assured me that they could handle it, so we went for it. Things started off great, but midway through the project my head contractor had some personal issues that really affected his work and it affected the whole crew. I had to make the hard decision to let that crew go in hopes of finishing this project, and I brought on another crew to finish up. I ended up losing money on that project with the transition of crews taking place, but again, I learned a lot, I made a good partnership with the investors, and I finished the project with a good end result.
Here are a few before pics:
Here's a dropbox link to view more before pics:
https://www.dropbox.com/sh/y8q9c999s949fft/AABRqy8...
Here are some after pics:
Here's a dropbox link to view more after pics:
https://www.dropbox.com/sh/3rv8h1jx3jcbfeh/AADzoYQ...
I am currently on my 4th "complete rehab" project for this year (was gonna post more pics but its a pretty timely process to post pics on this site, so for the sake of my time I'll pass lol), and I can say that with each project I am getting better. My goal is to systematize my operations so that I can easily handle 1-2 projects going simultaneously and closing out within a 45-60 day period throughout the year. This year I made the decision to quit my other job, which was running a landscaping business that I have owned and operated for over 5yrs now. I sold that business earlier this year, and I am officially a full-time real estate investor!! I have made the decision to get more focused and do what I ultimately enjoy doing-wholesaling and rehabbing. The way I have it planned out, I want to be able to wholesale 3-5 deals per month consistently (currently at about 1-2/mo), complete 1-2 rehabs every 45-60 days (not quite there, but getting closer), and as a broker, close 1-2 deals per month (need to pick up the pace to reach this goal). I figure with those goals, I will still be able to spend more time with my family and overall, have a personal life outside of work. That is main reason why I sold my other business and decided to focus entirely on REI. I don't want to have so much business going that I don't get the chance to actually live my life. I mean, its like I already have 3 separate businesses in this one industry at this point. Next year I will start accumulating more rental properties. I currently have my old primary residence in the W. Pullman area of Chicago that I was renting out, but I'm finishing up on some renovations so I can just list that one for sale. I want to focus on the area of Indiana that I currently live in, and also some parts of the south side.
I know I have said a lot, but I guess since I haven't had much time to post my progress, this catches me up a bit lol. I just want to encourage people to not let some of the obstacles of this business discourage you, and force you into giving up. As you can see from my past/current experiences, no matter what aspect of this business that you focus on, no matter what experience level you may have, things can, and will, go wrong at times. You will lose money at some point, sad to say, but its just the truth of being in this business. How you deal with losses, how you deal with things going wrong, and your ability to be able to stay consistent will really determine your success, or failure, in this industry. I lend myself to lots of newer investors when they come out the meet ups, who are serious mind you, because I didn't have that when I started out. If I didn't have the self-driven, entrepreneurial mindset that I have, I probably would've tapped out years ago when some of those other deals went south. Over the years I have met some very knowledgeable investors who have helped me out tremendously, and have contributed to a lot of my success. They seen that I was consistent in attending meet ups, consistent here on BP, consistent in sending out deals, etc. That is how you find mentors, and that is how you will establish your credibility in this business. There will be that small group of people that WILL NOT want to see you succeed, who will try to discourage you from getting into this business, and really try to deter you from ever making any progress. Those people are on this site, they're in your family, your circle of friends, and all over. Don't be quick to tell everyone your goals and what you plan to do, its best to keep some stuff to yourself and show people with your actions. Thats what will make believers out of people, and what will always have a bigger impact then merely "talking". There are lots of talkers out there who talk about what they want to do. Be a "Doer" and show people by taking action. I hope this inspires someone and helps you to continue working through some of the rough spots you may be enduring currently, and keep you motivated to keep pushing and have some success in this business. I always make myself available to help in anyways that I am capable of within reason; several people on this site can attest to that. I am no expert, or "guru", by a long shot, but just a guy who wants to pass my blessings along in hopes of continuing to receive them myself. I wish you all the best, and thanks for taking the time to read this (if you made it all the way through lol). Good luck, and I wish you all the best.