Without revealing any personal information, this is my report back to you:
The subjects ranged from investing in out of town rentals, property management, wholesaling, creating more deals, finding reliable contractors and Maryland basketball.
Out of Town Rentals
Many of you know that purchasing local real estate and expecting immediate cash flow can be challenging. The price of the property versus rent received is difficult to cash flow due to our expensive market. It is not impossible, and you can find pockets of opportunity, but more investors are looking to other markets for cash flow.
My suggestion is to look at mid-tier cities with job growth to find possible rentals. Cities that are focused on the health care, technology and banking industries are good markets. You will find opportunities to buy single family homes and small multi-unit buildings that cash flow. Job growth is the main driver for consistent cash flow.
Property Management
Property Management is a subject that is common with investors who own a number of rentals. The question is whether to manage the portfolio yourself or find a third party management company. You will find that a majority of smaller investors will manage themselves, but they will rely on third party companies to assist with out of town properties, larger multi-unit, or commercial properties. Additionally, in cases where they own a large number of residential properties and their time is better spent doing other money making tasks, they will outsource the property management.
Wholesaling
The most common way for new investors to cash a check. A new wholesaler should focus on finding good deals, analyzing properties, writing contracts, and creating a buyer list. There are a number of companies that have gone to this model as their sole income source and have created systems to wholesale 4-10 properties a month.
Creating More Deals
I had a great conversation with an experienced investor who completed over two dozen deals this past year. He would like to increase his volume next year. He can increase his marketing budget, add more support staff, add another strategy to find deals, and expand his geographical area. This is the best time of year to look back and see what worked and focus on those strategies to increase volume.
Reliable Contractors
Reliable contractors are another common area of conversation among renovators and landlords. The best source of affordable and reliable contractors is from other experienced investors. Create a database and continue to add to your list as you hear about other contractors who perform well. You can use Angie’s List and other sources of contractors as you need trades people. Start with a small job and see if they perform to your standards.
Maryland Basketball
One of my favorite subjects this time of year! The team has started off 9-2. They have a number of freshman in their rotation but still rely on upper classman Anthony Cowan and Bruno Fernando. My hope is that they can do well in the big ten conference this year and have a high seed in March Madness. If you get a chance to attend a game at Xfinity Center this season, I am always available for an extra ticket.
The appointments were very enjoyable for me. It was nice to have time to meet and talk about real estate and get to know each other on a more personal level.
Lastly, I thought you might like this article on action plans by David Finkel. I have said many times at our meeting, it is important to take some time to reflect and decide what you are going after in the New Year.
My hope is for everyone to have very Happy Holidays and take some time to enjoy yourself during this time. I look forward to an exciting and profitable 2019.
John Peterson
Founder, Washington Real Estate Investors Association