By: Shawn Bandick
I love real estate investing! After two and a half decades of investing I still love to learn, grow and adapt to the new challenges put forth every day. I love to meet new people and build new relationships.
Today I want to share a story with you of my partner and I, two guys who enjoy investing and how we gradually grew our business into a very powerful company serving other investors as they build their own investments. I hope that reading this article will help you when you are facing a fork in the road and a choice to get out of your comfort zone.
Move and move fast; that is the short version.
My partners and I have been investing for more than 25 years and every day we are learning more and adapting to a changing market. My wife Suzanne and I lived in B.C. along with our partners, my sister Cynthia and her husband Vartan Temorcioglu. We started with some basic investing in Canada. The real fun began when we discovered the investment boom along the Caribbean coast of Mexico. What can I say if there’s an opportunity it’s time to move and take advantage of it.
We set up a company with a complete power team and have been serving our international investors for more than eleven years now. What a ride it’s been! From moving to a new country, setting up the team and some good mentoring at the same time – and do it all in a new language and new laws. If that’s not fun I don’t know what is!
But when the market changes get ready to change with it or get left behind. By 2008 the shift was on, the market along the Caribbean coast was stopped. We knew the USA had become the best buyers market in history and as luck would have it as we were traveling on a plane we read several articles about investing in the USA. I love to hear about successful people who are sharing their success with those around them. Suzanne kept those articles and a few weeks later we began our research. It was time to let go of our comfortable set up in the Caribbean and get into another market. The first thing I learned in this industry many years ago is get aligned with the right people who have the same goals and build a support team around yourself. We strongly believe no matter how much you know and what experience you have it’s always a huge boost forward if you get aligned with a great group whenever you are making changes in your business. What an advantage it was!
We got our legal structure, accounting and corporations set up in short order and off we went. We chose to move our operation from the Caribbean to Charlotte N.C. We loved the city and started building a great team. We had our legal, our accounting and a great power team in place. Then came the challenges, I bet a lot of you can relate to this. How many doors do I have to knock on to get some real financing so you can reach the next step, how much time do I have to spend analysing properties, out of 40 plus offers a month (some well over asking price) shouldn’t I be getting more properties? Within a few months we weren’t getting any more properties. The area market had changed, the big hedge funds had moved in and we weren’t able to compete for the inventory. Our target was single family homes to hold for rental income and others to flip. We were comfortably set up and structured, but one thing we know for sure, when it’s time to move, identify the challenges you need to overcome and move sooner rather than later. As we found before, the longer we delay the move the more money we will lose and ultimately we will have to move anyway.
The great thing about choosing a new market and restructuring is you can take all you learned from your previous structure and address all those needs next time around in a fresh market that has a good inventory base.
The challenges were clear; we needed access to more inventory faster, more money, and an aggressive acquisition team and multiple rehab crews. Yup time to move.
Our research led us to a completely new structure and we added a couple new partners. Our thought was if you can’t compete with the hedge fund buyers you better partner with one. It happened at the same time after years of working in the Kansas City area our new partners were looking to restructure as well. After spending several years buying over 1800 homes a year for the hedge funds it was time to get more involved with the individual investors with a more hands on approach. This led to a very interesting merger.
The six of us put together an entirely new company InLaw Investments Inc, IN-US1 with the collective resources of all of us we built an operating platform to address all our previous challenges. We now have the ability to acquire 10 to 12 houses at a time, even in a tight market with the inside knowledge of a hedge fund buyer we found access to opportunities that were otherwise closed to us. That took care of two of the big challenges, now we have the inside access to inventory and the acquisition manager to be able to get it. With the combining of our assets and contacts we found we could set up our own internal financing. With our on the ground team we have expanded to four rehab crews.
Now came the interesting part. In our quest to set up a structure to allow us to reach our own goals we over shot our expectations and now have enough properties and funding that we can offer our clients all the services we wish we had when we started in Charlotte.
We have the inventory, rehab crews, on the ground management and even financing for those who need it.
As a result of high demand, we finally have been able to provide financing for all of our out of country buyers. It took a lot of work and the pulling of many strings with national financing contacts, but all of our properties now feature loans that we underwrite internally. Unlike other US “lenders” that take reams of sensitive financial info and never deliver, we can now guarantee acceptance at 50-65% LTV and we don’t have to wait for weeks for an outside lender who might put the lending on the table.
We have a few great clients who have been consistently buying from us and building their portfolios. Our clients typically find themselves short of time to set up the entire support team for themselves (or they simply do not want to) and they are looking for a way to get into the market faster with a good established support team. They know we do the same Due Diligence as they would and we only buy in well established B class neighborhoods. We know there are plenty of cheaper areas we could be buying in but the largest expense our clients will have is tenant turn over. We are conservative risk adverse investors, and really, if we are going to owner finance a lot of our clients properties they have to be solid investments in great areas to produce a steady cash flow for our clients.
If you are stuck and not making the goals you were expecting to, don’t be afraid to make a change. It will lead you to the opportunities you are looking for. Take the time to identify your current assets and the weaknesses in your business. Then it’s just a matter of surrounding yourself with a team who can help you in your weak areas and compliment you where you are strong. Let me know if there is anything we can do to help.
All the best of success to all of you from us at InLaw Investments Inc. and IN-US1.