This article is a guest post from Jeff Tamaru, Junior Partner at Wildhorn Capital, personal finance enthusiast and real estate technologist.
The first time I sat at the closing table I felt a rush of adrenaline, followed by the cold chill of sheer terror. I had just taken on more responsibility, liability and commitment than ever before. By putting my name to paper, I had purchased my first multi-family property, a little duplex in North San Antonio. In the weeks leading up to that moment I had run the math 100 times, examined every inch of the house, and consulted my real estate mentor ad nauseum. Walking away it felt good though. Millennials and home ownership usually are rarely mentioned in the same sentence, Millennials and real estate investing even less. That’s something I hope to see change.
A few things to clear up off the bat. I’m one of the lucky Millennials. I went into a 4 year degree and didn’t come out saddled with massive amounts of student debt. After five years of corporate work, I had the base level of savings for a down payment (despite the sucking noise my Manhattan rent created in my bank account every month). The thing is however, even without the traditional barriers of capital and access to financing, taking that first step towards property ownership had eluded me for over two years. After devouring thousands of pages of books and hundreds of podcasts, education wasn’t the issue either. Up to that point my inability to make a deal happen came from not taking action and going out to meet the right people. This almost derailed my journey multiple times and I think I’m not the only young would be investor who’s been troubled by this.
I analyzed hundreds of MLS properties for the Central Texas markets I was looking at, but always came to the same conclusion. The math never met my cash flow requirements. Looking back it makes sense, I was getting my pick of the bottom of the barrel. Up to that point I had invested most of my time into planning and very little into doing. Very few people close to the transactions that truly could be counted as deals knew who I was or that I was a serious buyer. Investing time into network building became my new priority. I would start to take note of listing agents who represented sellers of the property types and locations I was looking for. After figuring out who was doing the most business I would reach out to introduce myself, my desire to purchase deals similar to what they had represented and my financial criteria. Since my track record was limited at the time, it was always helpful to share proof of funds & financing. For the next few months outreach consisting of phone calls and coffee were my priority.
It was around that time that I met Andrew at Wildhorn Capital. Over lunch he shared his views about the importance of building a strong team and how the right relationships could make or break your investments. This was true regardless if you were looking to purchase your own owner occupied residency or a 255 unit apartment complex.
I took that advice and guess what? It worked! An agent who I had coffee with a few weeks earlier sent me an email saying his colleague was about to list a property that matched my criteria. I let this agent represent me and we were able to pick that deal up before it made it to market. Since that first closing, every single purchase I’ve made since has come from a similar story. The numbers on all of these deals continues to surpass comparable on-market deals. The same is true with the current 284 deal we’re working on through Wildhorn. This deal came as a result of a relationship and the projected returns are very strong. Changing my strategy and taking action to build a network turned out to be the best move I could have made.
If you’re facing something similar in your search take action, reach out and let’s talk! I’d love to hear about your situation, criteria and goals.