Learn this week’s Best Ever guest’s best ever books, personal growth experiences and lessons learned, real estate deals, and biggest mistakes
Best Ever Book – The 10X Rule: The Only Difference Between Success and Failure
Best Ever Personal Growth Experience and What Ben Learned From It – Getting fired from his first job
What did he learn? “I learned that I can’t know what everybody wants at all times, but I could know what I want at all times. I control my destiny. I can’t let anyone else control my destiny because people are too unpredictable.”
Biggest Mistake Ben Has Made So Far In Real Estate – Not signing contracts, nor setting proper expectations prior to going into business with someone
“I started my business and I didn’t really know what I was doing. I was sort of winging it the whole time. For the most part, I had [good] relationships but then once or twice, I got screwed. I decided it was time to start actually having contracts in place and putting things on paper. But in the beginning, I didn’t actually have any contracts … 90% of the time, they’d pay me. But then the two times that I got screwed, I realized that it’s so important that you have solid contracts and also to make sure to put out expectations ahead of time [for] what each party is going to be doing.”
Best Ever Book – How to Win Friends & Influence People
Best Ever Personal Growth Experience and What Andrew Learned From It Purchasing his first apartment, which was a 92-unit on the other side of the county.
“It was 75% vacant. It was out first deal and we needed to raise $1.2 million. I underestimated how challenging it was going to be to raise $1.2 million back in early 2011. I underestimated how tough it would be to manage the rehab on that. A lot of learning experiences came out of that. It did end well. We actually sold it last year profitably, but it was very much a growth and learning experience.”
What did he learn moving forward?
First – “We have a very specific checklist for screening properties based on the strength of the market and demographics. So we check median income. We check crime rates. We check flood maps, and a handful of other things that partially grew out of that.”
Secondly – “For renovations, before we go hard on our deposit once we’re under contract, I have a contractor bid, so it’s not just me. At this point, I can walk through a property and have a pretty good estimate, but on top of that, I have contractors giving me bids so that when we finalize our budget, I know really well what the rehab is going to be.”
Finally – “Also, tracking renovations. On that first deal, I didn’t do a good job tracking it. What I mean is: how much are we spending on each project vs. what we budgeted. Whereas now, I have spreadsheets and every month, the property management company has to send me a spreadsheet with all the capex invoices. They submit that to me and we track that vs. the budget so it’s a very strict and well-controlled process.”
Best Ever Deal Andrew has Done
“In July of 2014, we bought a 122-unit property in the Atlanta area for $2.4 million. We put about $940,000 in renovations into it. And then with soft costs and everything, our total basis was $3.5 million … with about $1.1 million of investor equity. This fall, it appraised for $5.4 million. If you were to deduct 6% for sales cost, if we were to sell it that would leave about $2.5 million in equity. That means all of our investors in 2 years time would see 120% profit and then that’s on top of the distributions you’ve been making for the last 2 years.”
Biggest Mistake Andrew Has Made So Far In Real Estate – Buying a D-class property
“[I] bought a property in an extremely rough area of Fort Worth Texas … We bought it in an area that was far rougher crime wise then we realized … It took more money to renovate because it kept getting destroyed, and it took longer. So, the headaches of doing that just wasn’t worth it and that’s part of what drove us over to B-properties vs. C, and frankly, that one was a D that snuck in.
Learn Andrew’s Best Ever Advice: How to Successfully Familiarize Yourself with an Out-of-State Real Estate Market
Best Ever Book – Rich Dad Poor Dad’s Cashflow Quadrant
Best Ever Personal Growth Experience and What Coleman Learned From It – Two-year mission trip
“About 10 years ago, I served a 2-year long mission for my church where I was in Nevada – a year in Las Vegas, a year in Reno. During that time, basically every day I was knocking on doors or talking to people on the streets … about religion and trying to bring people closer to Christ. That’s not a very popular topic to talk about. People don’t like to talk about politics or religion or anything like that
What did he learn? – “It was a good opportunity for me to grow in my ability to relate with others. Before that experience, when I was a kid, I didn’t even want to go in the grocery store because I hated interacting with the cashier. It was pretty bad, but that definitely allowed me to grow … and listen to people, to relate with them, and truly care about the other people.”
Best Ever Deal Coleman has Done
“We bought a house about a year ago: a single family for $62,000, put in $13,000 in work, so $75,000 all in. [We] refinanced it and it appraised at $130,000, so the bank gave us about $91,000. We got … cash in our pockets and kept some of it in the business. It’s a pretty good deal for a couple months of work.”
Biggest Mistake Coleman Has Made So Far In Real Estate – Bad experience with a prospective tenant
“One of my mistakes was just learning how to manage properties. One time I can think of is when I had an applicant apply for one of our properties. Typically, [when] we have them apply, [we] run a background check, we get them to sign the lease, and [then we have them] pay the deposit within 48 hours of that process. But, this one lady was a little flaky. [She] kept … cancelling appointments to meet to get the deposit and then she started hesitating. Two weeks later, she ended up backing out and I’d stopped showing the property to other people, so we I lost half a month of time and a lot of effort. I was something I look back on and shake my head [at] because I was not doing a very good job as a property manager. Fortunately, I haven’t made that mistake again.”
Best Ever Book – Think And Grow Rich
Best Ever Personal Growth Experience and What LaShannon Learned From It – Being a single mom
“Never give up. Let me share a little story about that. I’m a single mom and I went through a crazy divorce. Through that storm, I could have [given] up, but every single day, I told myself, ‘I must keep going, I must keep going, I must keep going.’
What did she learn? – “No matter how crazy your life gets, don’t ever give up because there’s always a blessing on the other side of your storm.”
Best Ever Deal LaShannon has Done – A quick $10,0000 profit from a wholesale deal
“This is a transaction that … I’ve made about $10,000 from … recently: a two bedroom, one bath. I got it for $35,000. I sold it for $45,000. That was the best ever deal I’ve done because it happened real quick. I didn’t have to wait a long time. It happened immediately.
Biggest Mistake LaShannon Has Made So Far In Real Estate – Being a one trick pony
“The biggest mistake that I’ve made, honestly, … is focusing on just one area of real estate. I think that in order to just really live your best life ever … you can’t put all your eggs in one basket. You’ve really got to be flexible with your real estate components … There’s so many different facets of real estate. I would say don’t focus in on one area. Get comfortable with that. Find other areas that you like and you’re good at and makes sure that you become a student in that and get a couple of area to focus on just outside of just one.”
In the comment section below, what is your best ever book, personal growth experience, deal, or biggest mistake?
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.