Many of us have been in them…
Many of us are still in them…
Some will stay in them forever…
Some can’t wait to get out of them as fast as they can…
I’m talking about the family business.
You see, I was once involved in my family’s flooring business – which subsequently led me into my current full-time house flipping and real estate investing business. And although I did enjoy working with my family in this business, it did come with a level of complexity you just cant experience in a regular non-family business.
And as anyone who has ever owned and operated a family business has most likely experienced – things in a family run business can get complicated fast!
So if you are running a real estate investing business, should you get your family involved?
How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties
This is the dream right? Going from zero to 10+ rental properties, providing stable cash flow and long-term wealth for you and your family, and building a scalable business model to boot! Learn how this investor did just that, in this exclusive story featured on BiggerPockets!
The Family Business Dilemma
When it comes to a family business, there are pros and cons.
On the one hand, you have family to help in the business. I love my family and I think the world of my brothers and sisters. We ran the family flooring business together for nearly ten years and fortunately, we became very successful.
On the other hand, you have family who helps but because of the emotional attachments and personality conflicts – there’s a level of drama that most people can do without. This level of drama and conflict is the kind that you can only experience in a family run business.
For me, I wanted to strike out on my own and do my own thing – namely become a full-time real estate investor flipping houses – so I left the business and its now in the capable hands of my younger brother David.
As much as I loved working in the family business, I desperately needed independence and wanted to do things on my own without having to answer to anyone. Not that I’m some rebel – I just wanted to do my own thing.
And I couldn’t be happier now being on my own, doing what I love.
A Chip Off the Old House Flipping Block?
A few weeks ago I wrote a post here on Bigger Pockets about my daughter Katlyn wanting to get involved in my business and the power of indirect influence. As shocked and amazed as I was that she actually wanted to get involved, I ended up taking her on three days a week in my new office in Bourne, Massachusetts.
Home for the summer from design school, Katlyn wanted a summer job and I had an urgent need. I didn’t really want her to go back to cashiering at Stop and Shop Supermarket, and although she was working another part-time job with a local architect I often do business with, she had the hours available to work with me.
So she came to me and asked if I needed help in my business. At first, I was a little nervous – but didn’t let her know that. I was thinking how fast paced my business is and wondered if she could keep up with the demand.
I was also reluctant because I had no idea how much training I would I have to give her – and if it didn’t work out – what could I do? It’s not like I could fire her! Quite honestly, my house flipping business is super busy right now. Our deal flow now is just through the roof. We are sourcing multiple deals every week and have five deals going right now alone!
In fact, most other people in our market are having real difficulty finding good houses to flip, but thanks to the hard work of my acquisition manager and really solid teamwork, we are finding deals almost faster than we can take them on.
So back to Katlyn…could she keep up?
I mean it’s not like I’m running some slow, low pressure business where people just punch the clock and cruise Facebook all day commenting on pictures of cats. Our office is super-fast paced – with the phone ringing all the time and deals and paperwork flying around everywhere.
Could she handle this kind of environment?
Fortunately for me, all my fears were completely unfounded. After just three days I knew I had a star on my hands. In fact, I couldn’t be more proud of the young woman Katlyn is turning out to be.
She immediately took the office by storm – entering bills into QuickBooks, filing weeks of messy paperwork overlooked in the move, getting the mail, making adjustments on excel spread sheets, cleaning the office, running errands, coordinating staging pickups and delivery and set ups…I am amazed at how well she is doing.
In fact, my bookkeeper Rianna came in one day to assist in training her on QuickBooks and she told me that Katlyn was the best one so far to work with and how quick she was to learn.
As you can imagine I am super excited to have her working for me part-time this summer and to have had the pleasure of being exposed to my business.
But as proud as I was and still am of her for taking the initiative and wanting to get involved, when she asked me I was a bit conflicted because of this family business thing…
The Power of Painting…
How Katlyn got involved with my real estate investing business was a big surprise to me.
About a month ago I purchased an office condo for my real estate investing business. As you can imagine – business doesn’t stop just because you’re moving, not to mention that transitioning from one office to another is a lot of work.
Although the office is in great shape, we decided to paint the interior walls to spruce it up. I was just going with the typical antique white like we use in most of our rehabs but my daughter Katlyn wanted to help with the color choice.
I mean – she is going to design school after all – so I said sure. She picked a green that I was a little skeptical about – but I went with it. In the end, it was the right choice. Everybody in our office and any visitors we have who come to the office love it.
To get the office ready, I was working double duty that week to get it done and not just Katlyn chipped in to help – but my younger daughter Hayley surprised me and volunteered to help as well!
I had no idea if they were going to slow me down, make a mess or get tired too quickly – but I was touched that they noticed how hard I was working and wanted to help.
Honestly, I hate to paint and I don’t even know why I was painting my own office when I had three rehabs going on and have plenty of cheap, out of work painters ready to go at a moments notice. I guess it is just the hard work in me and thrifty nature because this was my office and I wasn’t flipping it so I couldn’t see the value in paying for it.
Besides, my office staff volunteered to help as well and believe it or not – we all had fun doing it.
Katlyn is actually a really good painter (I suppose I should have known that). And much to my surprise and amazement, Hayley was a great little painter too! Although rolling was tough for her little arms – she was determined to roll right along with her sister…and she did.
Hayley worked so hard that day that when she went to bed that night, she was out like a light in two minutes from her hard work. I was proud of my little girl as I tucked her in that night.
And she drifted off…I just stared at her sleeping little eyes and I thought to myself: “is this the start of yet another family business?”
The Family Real Estate Investing Business?
As proud of them as I was for their desire to help their old man, I started to wonder what the future held for my soon to be renamed real estate investing business.
Would it become a family business yet again?
Although I never set out to have my kids involved in my business, it seems like there is a strong interest there. My wife and I always wanted them to find their own way by empowering them with the ability to choose for themselves. I just never thought that choice would come back to real estate.
Sure, Katlyn has three more years of college – so there’s plenty of time. But I think it’s so cool that she wants to be involved in real estate already.
I’m not sure what my daughter Hayley is considering as a career path – but with a real estate investing father and a real estate broker mother – I can’t imagine she isn’t being indirectly influenced as well.
Maybe she does, maybe she doesn’t. Right now, she likes watching all those baking shows and just the other day she told me she may want to be a baker and make those awesome cupcakes she’s seen on television.
I told her if that’s what she wants to do then she needs to make the best cupcakes in the world – because if that’s what she want to do then she should go for it and be the best!
But what if she too wants to get involved in my real estate investing business? Should all of us go down the family business path?
It may seem great now, but what happens when things get tough?
Or is it better to NOT get your family involved in your real estate investing business?
As proud as I am with both of them, it’s a worthwhile thing to think about.
What do you think? Is a family real estate business a good idea or does it just eventually lead to conflict, hurt feelings and uncomfortable awkward silences at the Holidays?
Please leave a comment below and let me know what you think!
Photo: D. Sharon Pruitt