All Forum Posts by: Matt Jones

@Yitzchok Carmen I loved his book The Compound Effect, hearing him talk about media consumption in the book really opened my eyes.  I've never been a huge fan of the news but it put words to how I felt about it.

@Paul Shannon That's been the best part of all this, seeing lots of people show compassion and help others.  Lol about the real armageddon, same here!

@Jay Helms For sure.  By the way, I saw on FB that you are in RE investing full time now so congrats!

@Nile Yacob I could not agree more.  That insight is what started me on my RE journey several years back.  I'm not saying that no one should work a W2 job, there are certainly some excellent and well paying W2 jobs out there but it's important to realize that being an employee is probably not as stable and secure as people tend to think.

Welcome back to the area Courtney!  I am an agent and investor that works from Perdido Key to Navarre, feel free to reach out when you make it to town!  You'll find a very active group of investors along the panhandle that are helpful even in a competitive market.  Many of them are on BP and there are several meet ups in the region as well.

@Nathan Gesner Great point!  Making sure that your communication is clear and productive is critical in a time like this.  My Uncle was in real estate in the 90's and I remember him saying "I can give you good news or bad news but I can't give you no news".  Some people in this business tend to avoid delivering bad news and just go quiet, this is the worst time for that.  We can deal with and often overcome what we know about but cannot plan for what we are kept in the dark about.  For that reason I am making sure to keep people informed and touch base to let them know when things are taking longer to resolve than planned so they don't fear the worst and react poorly.
I have seen a few of those examples of terrible communication and what those people need is not more or less communication, they need a sense of self awareness and some consideration for others!

@Jerry W. I totally agree that we are not usually as smart as we think we are.. in a prolonged growing market like we have had it is so easy to believe we are geniuses rather than to observe the big impact that the strong market around us is having on our success. Of course, that overconfidence can cause some pretty big failures in the wrong deal or when the market turns sour!

@Martin Lindsay I agree with modifying your near term plans to fit the market we are in.  I was just surprised by some people having a knee jerk reaction(I'm selling all my stocks or rentals or whatever ASAP!).  My personal 2020 goal was to buy my first vacation rental property so I used the current market to reach out to an out of town investor I know that owns a few on Pensacola Beach thinking he might be more inclined to sell now than he was the last time we talked.  He was, and my wife and I put a great townhome under contract in a complex we like and at a price that will allow it to cashflow(or at least break even since we plan to spend a good bit of time down there).  My other 2020 goal was to stockpile cash for capital expenditures and to be able to take advantage if the market cooled off in 2021.  Even in the face of COVID-19 the market is still surprisingly strong but could soften a little later this year.  However, if the nation gets back to work fairly quickly we could have a very strong summer housing market.  

1. Cash is king. I personally invest in real estate and spend a lot of time with other investors but this lesson would be even more valid for small businesses and even just for individuals. Having an emergency fund is absolutely critical no matter how well things seem to be going. If you are a small business owner or real estate investor you should be working toward 3-6 months in reserve operating expenses for both your endeavors and your household. With short term rentals being prohibited in the state of Florida and overall rent collection down it highlights how important it is to have enough cash to keep your life/investments/business running even if you cannot make any income in the short term.
2. Once you have a farm don’t bet the whole thing! To get into real estate investing and later real estate sales I made some big bets on myself and put everything I worked for during my 20’s at risk. The economy was good, I worked my tail off and both bets paid dividends. In the end I am thankful for both choices and where I am today. That said, had I made those choices in 2020 instead of 2015-16 things could have turned out differently. I have been working hard over the last 5 years to build a rental portfolio and sometimes I am frustrated by having to pass on deals because the timing isn’t right or I don’t have the capital. I have seen other investors grow by doing deals that I certainly could have done but they just didn’t fit my criteria or I didn’t have the capital because I was involved in another deal. That’s painful sometimes. Despite temptation, I have not pulled money out of my performing rentals to help me do more deals. I started with the intention of having a certain amount of equity in my portfolio. While I could grow faster if I borrowed on that equity to reinvest, I view that equity as my margin of safety. If the market went down or my tenants don’t pay rent I can handle both much better and with far less risk because I have maintained my margin of safety. With COVID-19 a large reduction in rent collected looked like a real possibility but I maintained peace of mind knowing that my mortgage payments were far less than rents so as long as half of my tenants paid I could continue to pay the bills without drawing from reserves or personal capital. Over leveraging myself to do another deal or a bigger deal may have looked low risk a few months ago but now I am very thankful that I stayed true to my strategy and did not make bets that placed all of my holdings at risk.
3. Be careful how much media, social or otherwise, that you consume. In the beginning days of the COVID-19 pandemic I was reading a lot of news and on various social media too much. I was feeling genuine anxiety. After intentionally backing off of the news and filling my head with quality material like goods books, podcasts and conversations, I felt much better. I like the visual Darren Hardy laid out in “The Compound Effect” of a glass of dirty water(your mind with no control over what goes into it, receiving lots of negative news and social media) becoming a glass of clean water if you run a steady flow of clean water(good books, podcasts, classes) into it. We can stay informed and responsible on a fraction of the media we consume. Don’t get pulled into the 24 hour negative news cycle - it’s not helping.
4. I hate fixed costs & you should too! I am a bit of a control freak. I don’t admit it often but it’s true. For that reason I have avoided large fixed costs both personally and in my business life. Things like massive car payments, huge house payments, credit card bills, expensive office leases, overhead, payroll, ect… I am thankful for having low overhead in normal times because it gives me more options in my personal and professional life. In addition, I don’t normally need to make bad short term decisions motivated by the need for money to pay next month's bills. The need for control overwhelms my need for the newest or best this or that and I tend to be conservative financially(even while trying to be aggressive in my investments). I love a good splurge just like anyone else but I have never in my life felt more thankful that my splurges tend to be one time things because I rarely view anything(that doesn’t make me money) as being worth the payments due over the long term. Low personal & business overhead = maximum flexibility and security.
5. Long term plans don’t need to be scrapped or maybe even changed. That’s why they are long term plans! I was amazed at the amount of people who were selling off stocks because they were in a coronavirus panic. If you don’t need the money today the only thing you are doing by selling when the market tanks is locking in your losses. I watched things closely and reviewed my long term plans but nothing happening today changes my 5, 10 and certainly not my 20 year outlook. If you have been diligent in charting the course don’t abandon the course unless your personal ship has been wrecked. Some people have experienced major loss and disruption due to COVID-19 but many more have not been impacted in a major way financially. Don’t get so excited by something in the short term, that hasn’t wrecked your ship, that you lose sight of where you are headed. Stay the course.
   
   Specifically in and for Real Estate:
6. Over communicate in times of uncertainty. Whether you are a landlord or a real estate agent, in a crisis it is more important than ever that you keep people informed. It is much easier for people to freak out, make bad decisions or assume the worst when they are left to guess in times like this. Keep the people around you informed about the plan(you do have a plan don’t you?) and communicate more than you usually would to keep things running smoothly.
   
   
   Those are my personal takeaways from the first 6 weeks of COVID-19's impact on the US. Now I want to know...
   What are your lessons learned during the last 6 weeks?

I absolutely love Pensacola and the surrounding area but in your situation I think I would have to go to Oahu for a few years.  I don't think that precludes you from investing in Pensacola or anywhere on the mainland.  In fact, if you can become an excellent long distance investor while you are there making better money then you will be even better positioned to invest when you return to the continental 48 in a few years.  Go have a cool life experience and pursue your investing dreams at the same time would be my advice. 

@Matt "Roar" Gardner Definitely, whenever the world gets back to normal we can meet up for a coffee or something!  If you are looking for something specific between now and then just let me know.  The active 6 unit in Navarre is on Esplanade St if you want to pull it up on the CMLS or send me a message and I’ll send you the link.