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Monday, March 31, 2014

Real Estate & Fly Fishing - Change of Scenery



I like to spend my Sundays fishing the local high mountain freestone streams. I go 3 out of every 4 weekends. It is a succession of pools, almost like a fish ladder, all the way up through the rocky valley. The entire stream, with the exception of a few short flat runs, is literally pool after pool and in each is a hungry little trout waiting for my presentation. Sometimes, these pools are secluded from the rest of the stream in that there is a high waterfall at the beginning and an obstacle at the tail, be it a fallen tree, shallow water, or some other obstruction essentially imprisoning the fish until the water levels change and either flush it further downstream or give it an opportunity to move further up. When I catch one of these hungry predators, every once in a while I choose to liberate the trout and release her into another pool hoping she appreciates the change of scenery, other fish she encounters and new sources of food.

I recently purchased a rental property from an out of state landlord. She lived there 20 years ago, but since has changed husbands and homes now leaving her residing on the east coast. She told me her tenant had been in the house 19 years. I was telling my fly fishing partner and fellow real estate investor about this situation. He responded quite simply, “Sounds like he’s in a rut.” As I thought about this man in this situation, paying rent for 19 years, I decided to help him too get some change in his life and sent him a 60 day notice of termination of tenancy. 

I can only hope he too will eventually appreciate the change in scenery, other people he will encounter, and new sources of food from local restaurants wherever it is he ends up.

Real Estate & Fly Fishing - What Are You Targeting?

It really is amazing how many similarities I see between my real estate investing business and fly fishing. Actually, any fishing. For example; if I told you I like to buy houses, it would be too obtuse to understand. 'Houses' is a such a broad word. It would be better if I told you specifically what type of houses I like to buy wouldn't it? Just like fishing, if I told you let's go fishing on Sunday, be ready, I'll pick you up at 9am, you'd have absolutely no idea how to dress or what to bring. What if 'ready' to you meant shorts, a t-shirt, a lounge chair, flip-flops and a surf casting rod, but I took you up in the mountains to fish for trout on a freestone stream? Your flip flops wouldn't do so well on the slimy rocks, your legs would get destroyed by the scrub brush and that surf casting rod might be a bit overkill.

Likewise, if you told me you are a cash buyer and I kept sending you wholesale deals I had on $500,000 houses, but you are a cash buyer only for $150,000 houses or less, you probably wouldn't be too interested or prepared to close on any of those deals. They might be deals, but not to you. Same goes if we reverse that scenario. You want to go out fishing for tuna, and I keep inviting you to catch pan fish - you're probably not interested.

When I fish for steelhead, I bring a heavy rod, typically a 6 wt, with fluorocarbon leader and I dress warm with chest waders. When I fish for trout on freestone streams in the mountains, I bring my 1 wt superfine rod, wear a long sleeve shirt, and typically wet wade with just wading boots and neoprene booties. The hunt determines the gear. When you go 'hunting' for deals, make sure you are determining what exactly you are hunting for before you set out. If you're going after entry level houses, know your product, the typical cost of rehab, what they might sell for in the farm they are in and who your buyer most likely will be. Because you'll never find what you don't look for. Being correctly geared up is the best recipe for success.

Thursday, March 27, 2014

You Probably Already Know What You Need to Do...

...but, you're just not doing it. That is what I have found from the countless consulting sessions I have been having week after week. Don't get me wrong, I thoroughly enjoy meeting with other investors and know that I am very good at revamping businesses. Just ask my last business partner how different his life is now.

When sitting down with a client, the first thing I want to know is what does their business look like. Many times, they have one source of deal flow. All their properties come from one, maybe two sources and this is the lifeline of their business. To me, that is unacceptable. I have no less than 5 ways I attract leads into my office and am always looking for new sources to implement.

Next, we cover the specific items they want to discuss. I ask them to submit these before we meet. This typically takes up the majority of the time and I think it is important to cover the topics in-depth. The interesting phenomenon that I have discovered is that most investors already know exactly what they should be doing, but are just not doing it. I have found that they simply need reassurance that it is OK to implement that new idea. Sometimes, it needs a little tweaking from a professional such as myself, but mostly they have the general idea of what needs to be done.

It reminds me of a story I once heard, and I don't recall the players any longer, but it went something like this; A large company hired a consultant to help them grow their business. The consultant came into the board room, told all the executives to pull out a piece of paper and a pen. He then told them to write down all the things that they thought they should be doing, but weren't. When they were finished, he said, "Now, do those things." I also don't recall exactly how much they paid him, but it was considerably more than I charge.

If you need help in your business, I'm sure I can answer any questions for you, feel free to contact me. Most of the time, it can be handled within a few minutes over the phone at no cost. If you actually NEED to sit down with me and discuss your business in depth, you can reach me at www.AarontheHouseBuyer.com and click on the 'Services' tab at the top of the page to schedule a consulting session. All information is held in the strictest confidence and I'm positive you'll walk away re-energized about your business and have a plan of action to help you make more money, faster, with less work.