This week we saw CPI come in hot at 9.1% with many people (myself including) believing that the real figure is much higher. Inflation impacts everyone – including our tenants.
Meaning that we need to focus on being an efficient operator. We should expect inconsistent rent collections, increasing labor/material costs, and higher borrowing costs. The best operators will end up buying the best performing properties from the burnt out operators.
Which brings us to today’s investor – an operator with 40 doors across 3 states. Please meet Colin Ridlon!
How many doors do you have?
Right now I have 40 doors
What got you into real estate investing?
I picked up a SFH with a VA Loan at my first duty station in the Army. When I got orders to move, I rented it out instead of selling. That began building a comfort without out of state investing and using property managers.
What market(s) do you operate in?
Ohio, Tennessee, CA
How would you describe your portfolio?
A mash-up of C- to B+ duplexes, quadplexes, and sixplexes
What are you currently buying?
Anything that pencils at a 7.5% interest rate
Tell us about your biggest mistake in real estate?
Neglecting the infrastructure necessary for out of state investing. If the property manager is awful, it doesn’t matter what the investment looks like on paper. I had five units that should’ve grossed 4% of purchase price, but the property managers unwillingness to collect + send money in a timely fashion created nightmares that were never worth the profit.
Tell us about your biggest win in real estate?
Getting out of my biggest mistake – managing to sell the problem properties managed by the problem property manager for twice my purchase price. Honestly, it still wasn’t worth it.
Outside of real estate what else do you invest in?
Stonks and start-ups
Books people should read before investing
I don’t think you need to read books before investing. What you’ll learn by doing is much more valuable, even if it causes more short-term pain.
What advice would you give to a new investor?
Define your “why” and get started. You’ll need to make decisions with imperfect information, so don’t try and make things perfect. Just ship it and pivot.
As some of you know, I’m currently in Brazil seeing my wife’s family. She hails from a small town about 2 hours northwest of Sao Paulo. The experience is akin to experiencing the United States by flying into JFK Airport and then driving 2 hours into upstate NY.
Brazil is a wonderful country with strong traditions. One being the importance of being with family. In America the collapse of strong family ties is a common theme. But for many of us we don’t fully appreciate what that actually means.
We see the entire family (aunts, uncles, cousins, and if you’re lucky grandparents) 3-4 times a year. Likely Thanksgiving, 4th of July, and a few religious holidays.
But in Brazil that is shocking to try and communicate. Because every spare day is spent with your extended family. On the weekends people don’t go golfing, hunting, or binging Netflix. They all get to together for a family BBQ that can last all day (or even days).
The men stand around the grill, the women talk, and the children carry platters of fresh BBQ. It’s beautiful and weird to think how foreign it feels.
See you on Tuesday!