This year we are marking 15 Properties in 15 Years by sharing our top insights.
If you are interested in real estate, but don’t know where to start and don’t have network of real estate professionals to lean on, don’t worry – we didn’t either when we started.
The most important thing we did to start was to let other people know that we were looking to buy.
Lead on our first property was through a friend
We didn’t really know where we wanted to buy our first property when we started looking in 2001, but since it would be a weekend home, it needed to be reasonably close to New York City. While that helped narrow things down a bit, the tri-state area is enormous, and there were many places we could consider.
I started telling all of my friends that we were thinking of buying a weekend home, and one of my friends, someone I worked for in college and stayed in touch with over the years, told me about the place where she grew up (Little Silver, New Jersey), which met many of our criteria for places we wanted to be, and ultimately we ended up buying there.
This friend was not in the real estate field, did not have an interest in real estate, and didn’t even own real estate – she works in higher education, helping students to find jobs after graduation. But, she proved very useful in giving us the lead on the place we wanted to look.
Other friends had told us about other places they knew of, such as Kingston NY and Brewster NY, which didn’t quite meet our criteria, but were helpful in helping us narrow down what we wanted.
Lead on Asheville realtor and property manager came from a friend in retail
In 2005, we were ready to buy our first investment property. We knew we could not afford real estate in New York City, or in the US Northeast, so would need to find an affordable market elsewhere. Some of the key criteria we used to narrow down the market was that it should be a place we could drive to, and also be a place we might want to spend time during retirement, the idea being if we held the property long enough, we be able to use it ourselves in retirement.
Asheville, North Carolina was one of the places that met our criteria, as we kept seeing it listed as a desirable retirement destination. Even more importantly though, we had a friend who lived in Asheville. I met her several years earlier while taking an acting class, and in the intervening years we had stayed close, and eventually she married and followed her husband to where he grew up, which was Asheville.
Her husband did construction work for a builder in Asheville, who also ran a real estate brokerage, and they made the introduction for us. It turned out that we liked what we saw from the realtor, also liked their property management business, and we ended up purchasing three properties in Asheville over the next three years.
Again, this friend was not in the real estate business, but as a result of staying in touch with her over the years, we were able to utilize the connection that she lived in a market we were interested in, and that her husband had real estate contacts in the market.
In this case it was our contact at the second degree of separation (friend’s husband) that proved to be useful. Since you never know what connections friends may have within their families, it is important to talk to people about what you are doing because you never know if someone in their network might be of help.
Lead on home equity line was a colleague from a professional association
As the value of our Little Silver house increased, we opened a Home Equity Line of Credit (HELOC) on the property and started to use it to make down payments on our next investment properties in North Carolina. Back in 2009, after the real estate market crash, our Home Equity Line of Credit (HELOC) was called by the bank (ie: CLOSED!), which was potentially disastrous since we’d have to come up with the money to pay back the loan.
Again I started talking to the people in my circles about the situation to see if I could find a lead on getting another HELOC. At the time, I was participating in a local chapter of a professional organization (BNI Group) for the purpose of networking and generating leads for my business, and someone in the group was able to refer us to another bank who was able to issue us a line of credit.
As with the first example above, the person who gave us this lead was not in the real estate field at all, just happened to be part of a professional organization I was a part of, and happened to work for a bank.
While the organization I was a part of was professional in nature and related to my business, it could easily have been a social organization or a local rotary club.
Lead on Jacksonville as a market came from a distant family member who worked in technology
Fast forward to 2013. We had our weekend house in Little Silver, and owned two additional properties in Asheville (we originally had three, but ended up selling one). We had fully caught the real estate bug, enjoyed receiving monthly rent checks on the Asheville properties, but were unsure how to expand as the Asheville market had become too expensive for purchasing investment properties.
One day we were having lunch with a distant cousin of Scott, and the cousins wife, and they told us about an investment property they just purchased in Jacksonville, Florida. They were aware of the market because someone he worked with had recently retired from corporate life and relocated to Jacksonville to become a realtor.
We had not really been aware, but Florida real estate was hit really hard in the 2008-2009 recession and it took a very long time for the real estate prices to bottom out and start to rebound. In 2013 they were just starting to rebound in Jacksonville, and it turned out there definitely was real estate available that worked as rental investments. Within a couple of months, we visited Jacksonville ourselves, met with the realtor, and ended up purchasing three properties during that recovery period of 2013 and 2014.
In this case, the lead came from staying in touch with a distant relative. This relative worked in the tech industry, not real estate, and while they invested in real estate, they had only a few investments, so for them real estate was more of a hobby. They probably didn’t share their real estate dealings with many people, but they were eager to share with us because they knew we were also real estate investors. While we were already established as real estate investors and that is why they told us about their deal in Jacksonville, they likely would have shared the same information with us if we were just starting out.
Next steps for you
We didn’t build our real estate professional network overnight, nor did we purchase our properties overnight. It all takes time and careful due diligence, and we started slow.
My best advice for getting started is to start small, and to share your plans with everyone in your circles, because you never know who might be able to help you, or when a friend has a friend or family member who can help.