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We recently just had some new friends and potential real estate clients over for dinner the other night. They have been talking about getting into purchasing multi-families for a while now and just wanted to talk to us about getting over that nervous hump. Maybe you’ve been there, maybe you are there right now… where you talk and talk about how this would be good for your family and that an investment property or two (or ten) would be an incredibly smart decision for your future… but it never goes further than the “what if” stage.
As with most things in life you can often find that you are significantly more ready to dive into something when you are well prepared, am I right? I’m a nervous wreck when it comes to speaking in public but if I have what I’m going to say written out and mostly memorized beforehand I feel a lot more confident and slightly less nauseous. The same goes when purchasing investment properties. So how do you get over the hump of just wishful thinking and make it a reality? Here’s how:
That’s our number one piece of advice. If you have your people around you then you will be so much more confident to move ahead with any project. Over the years we’ve built up our team to include:
- Mentors. This category includes the broker at our real estate firm, Peter Vadala from Vadala Real Estate, who, for a year, had AJ has basically as an apprentice teaching him to run a 15 family (which he sold to us). We regularly go to him for advice. Within the past few months AJ has been trying to add people to this category in loose terms… like just a simple breakfast with people to pick their brains about how they are managing their real estate portfolio. Mentors keep you learning and growing.
- An attorney. We’ve had three attorneys since we’ve started purchasing investment properties. It’s amazing how much we rely on them. Our first one died unexpectedly, our second retired and our third, like the other two, is fantastic. There have been numerous phone calls about tricky tenant issues to each of these men. An attorneys job of knowing property law will keep you out of bad situations. They will also know how to encourage you on the best course of action in any situation. We recently just went up to Maine to run the Beach to Beacon 10k and stay at the home of our current attorney’s parents (they live where the race was held)… that isn’t a typical attorney / client relationship but we’e also gone out for dinner with them and generally built a relationship outside of work. Our attorney, Dave Ekelund, is the man pictured with his wife right after the race.
- A plumber. A frozen or burst pipe can cost a landlord big money so if you have a plumber you give significant business to they will know your properties. We’ve used the same plumber for years so they have records of every repair or replacement part (water heaters, etc.) that they have installed for us. We use Andrews Plumbing in Gloucester, MA.
- An electrician. We love the man we’ve used for a few years and the relationship is reciprocal, both of his son’s have purchased homes with us. We use Shields Electric, he’s based in Boston’s North Shore.
- An accountant. There are all kinds of tax laws that we knew nothing about but, like our attorney, it’s their job to stay up to date. Ours has literally saved us thousands in taxes in legal ways that we knew nothing about.
- A builder. You know I’ve raved about Boyd Builders many times… they put the front porch on our last house and did the wainscoting in our half bath. Oh, and we flipped a house with him. I even took care of his daughter last year a couple days a week. Find someone you trust!
- Tools. Okay, weird, right? The number one with the best return on investment that we’ve purchased for our own home and for the rentals has been THIS. It’s $45 and just the first use paid for itself. Our plumber charges $90 / hour. If AJ can fix something with this $45 tool multiple times… well, do the math. If there is one thing you purchase as an investment for your home (even if you don’t own investment properties) it’s this. This week AJ fixed a clogged tub drain and a stopped up vacuum with it. It’s incredible.
I hope you’ve learned something to make you less nervous moving forward with jumping into the investment property field. It’s frightening but so much less so when you surround yourself with knowledgeable people. If you live on Boston’s North Shore and don’t have a real estate agent we’d be more than happy to take your out to dinner and talk with you about purchasing an investment property and answer any burning questions. We’ll fill you in on the basic things you need to know to get started looking at properties and then walk you though the offer process. OR if you are looking to purchase your own home and aren’t ready to jump into investments we’d love to chat with you about that too. Email me at firstname.lastname@example.org if you’d like to set up a time.