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- 🔍 Lessons from my biggest investing mistakes
🔍 Lessons from my biggest investing mistakes
Plus: Darin Davis of Presario Ventures breaks down the cost of doing nothing in today’s market.
Best Ever CRE Team
October 12, 2023
Hey there, Best Ever Community!
In today’s newsletter, Joe and Ash share their four biggest real estate mistakes and Darin Davis of Presario Ventures breaks down the cost of doing nothing in today’s market.
First time here? Make sure to subscribe to stay up to date on all the latest CRE news!
Let’s CRE!
🎙 ICYMI
ON THE BEST EVER SHOW
🔨 Aaron Saunders: Maximizing Returns in Ground-Up Development: Aaron shares his background in construction and real estate investing, discussing his transition from single-family homes to multifamily limited partnerships. Listen here.
❤️ How to Evict With Compassion | Bonus Operations ft. Slocomb Reed: Slocomb discusses the significance of evicting tenants with compassion and professionalism, emphasizing clear communication, advance notice, and rental assistance. Listen here.
🚚 Should You Move to a Zero-Tax State? | Passive Investor Tips ft. Travis Watts: Travis discusses the financial benefits of moving to states with lower or zero income taxes in the United States. Listen here.
🗞 NO-FLUFF NEWS
JOE FAIRLESS & ASH PATEL’S BIGGEST MISTAKES
Joe Fairless and Ash Patel crashed the most recent Best Ever Cincinnati Mastermind to share with the audience the biggest mistakes they’ve made as investors. From self-limiting beliefs to bad partnerships, losing money on deals, living in model units, and more, Joe and Ash told their best and most humbling stories from their real estate careers.
🚧 Ash’s biggest mistakes included letting the fear of losing other people’s money keep him from raising capital, not hiring an assistant sooner, and not “dating” an early partner who turned out not to be partnership material. His biggest mistake, he says, was not going bigger, faster.
📣 “I lied to myself and everyone around me,” Ash said about the extent of his early self-limiting beliefs. “I said, ‘There's a sweet spot in commercial real estate between $300,000 and $800,000.’ That was a lie. That was just my comfort zone … it was fear. I was scared to do bigger deals.”
🚧 Joe’s biggest mistakes included a “lack of situational awareness” when using floating-rate loans, not having difficult conversations with investors early, and not being intentional about building the right network, sooner. One of his earliest mistakes, learned from his first apartment deal, was trying to do everything himself, all the way down to filling potholes with asphalt out of the trunk of his Toyota Carolla. The deal had potential, Joe says, “but I messed it all up on the execution front.”
📣 “There were lots of challenging circumstances,” Joe said of that first apartment deal. “I ended up losing money. I paid back my investors, plus 14% return, out of my own pocket. But I had 12 investors. I had 12 challenging phone calls with those 12 investors. And I said, ‘I don't know how long it's going to take — this property's going to lose money — but I'm going to pay you back,’ … and I did. It took about two or so years to do that.”
📰 Other CRE News
Tenants vs. Landlords: Office tenants are asking to take a closer look at their landlords' books as a wave of distress threatens to upend the market.
Goliath vs. Goliaths: The hotel industry and Airbnb are at it again. In this episode, Hyatt, Wyndham, and Marriott ramp up extended-stay options to challenge Airbnb and Vrbo.
Oversupply vs. Overreaction: There’s a supply problem in multifamily, but its long-term effects on rental rates and occupancy may be overstated.
Attention House Hackers: Starting the weekend after November 18, 2023, Fannie Mae will allow 5% down payments for owner-occupied 2-, 3-, and 4-unit homes.
Northeast Tops Rent Growth: As pricing power deflates across the nation, the Northeast apartment region has taken a record lead over other U.S. regions.
Ready to Pounce: One expert estimates that closed-end funds are holding as much as $300 billion of dry powder to invest in CRE as they wait for a reset.
Developer’s Dream: Three of the top four metros in Texas all had office vacancies above the national average of 19.2%, yet they’re still building, as cheap land and lax regulation encourage developers to overbuild.
Got $4,000?: With New York City’s median rent reaching $4,000, CNBC decided to see what that would get you in 10 other U.S. cities.
💻 FREE WEBINAR
INVESTOR ATTRACTION ACADEMY
🧠 Want to learn how to achieve a significant edge in capital raising and effortlessly attract high-net-worth investors? Then join Best Ever CRE and Yakov Smart of Investor Attraction Academy in a FREE live webinar on October 26.
🎓 In this 30-minute webinar, you'll learn:
The #1 question you should be asking yourself when it comes to finding investors beyond your current network. Hint: It's NOT what you think!
Why AI is an untapped goldmine for raising capital and attracting high-net-worth accredited investors.
The hidden system for booking meetings with potential investors and raising capital on auto-pilot.
👉 Register here to join us at 2 p.m. EST on October 26.
Can't make it on October 26? Register anyway, and we'll send you the replay.
✍️ BEST EVER BLOG
FROM PRESARIO VENTURES
Presented by:
🏢 For both experienced investors and those considering venturing into commercial real estate, the complexity of today’s economic climate is undeniable.
Despite the negative news that’s deterred some investors, Darin Davis of Presario Ventures believes that the current moment presents an excellent opportunity to invest in a resilient asset class like CRE. In fact, not taking action could prove to be a costly mistake. Here are just a few reasons:
📈 Inflation Hedge: Inflation rates have been on the rise, and even if they eventually stabilize, they are expected to remain above the government's target of 2%. Commercial real estate, particularly multifamily properties, can serve as an effective hedge against inflation because landlords have the flexibility to adjust rents annually, potentially outpacing the rate of inflation.
💸 Cash Flow: Multifamily real estate investments offer cash flow from rental income. This consistent income stream can provide financial security and is less affected by inflation compared to cash or other low-yield investments.
🏠 Tenant-Paid Mortgage Reduction: Investing in multifamily properties allows tenants to contribute to paying down the mortgage, which can enhance the return on investment over time.
💪 Resilience in Economic Uncertainty: Commercial real estate, especially multifamily, has historically proven to be a resilient asset class that can weather economic uncertainties. The adaptability of multifamily leases and the ability to adjust rents annually make it particularly well-suited to changing economic conditions.
🕰 Appreciating Asset: Commercial real estate tends to appreciate over time, offering potential capital appreciation in addition to cash flow and tenant-paid mortgage reduction.
💬 “No matter the climate, there is no time like the present to invest in an appreciating asset, especially one as robust as commercial real estate.” —Darin Davis
✏️ More From the Best Ever Blog
❤️ Best Ever Cause: Since its inception, R4Creating has been dedicated to engaging youth in STEM education through various means, including competitions, leadership roles, and entrepreneurial pursuits. The organization's primary goal is to harness the natural curiosity and energy of young individuals, enabling them to achieve extraordinary feats and unlock their full potential.
We invite you to join the cause with us and give to R4Creating today!
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🎓 EXPERT RESOURCES
FREE DOCUMENT DOWNLOAD
🙋 5 Questions to Be Prepared to Answer Before Meeting With Investors
It is extremely advantageous to be prepared to answer questions that you know your investors will ask BEFORE reaching out to them asking for private money or presenting a deal. Here is a list of five questions you should be able to answer quickly and efficiently when having conversations with your investors.
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Have a Best Ever day!
—Joe Fairless