Good morning,
One of the great things of FinTwit is the wide variety of perspectives. It’s one big melting pot of investment minded people who (for the most part) are more than happy to provide insight.
In particular I enjoy hearing what other investors are doing outside of the United States. One investor is particular that is always popping up in my feed and sharing great insight is Side Hustle Houses out of the UK.
It is my pleasure to introduce you to Dave from Side Hustle Houses!
How many doors do you have?
If you count student doors it’s 8 but buildings is 4
What got you into real estate investing?
I stumbled into house hacking whilst renting rooms to friends when we were all starting out professionally.
My career took me in another direction and I spent a long time working abroad and traveling. When I put some roots down I wanted to start investment seriously.
I believe in sticking long with Real Estate which is where my risk level falls into line with. It’s a fun way to invest and there is always lots to learn. I now run the Twitter account to help pass on my experiences and knowledge whilst also levelling up with those further along the journey.
What market(s) do you operate in?
Student HMO rentals as well as Single family homes.
How would you describe your portfolio?
Diverse, I’m still exploring different investment models and deciding what I like best. I think having a mix stops you getting burnt if there is a major change in a certain market.
What are you currently buying?
So the answer to this is not straightforward and annoys my agents a lot but the answer is good deals. No two of my properties are the same and that’s down to chasing a good deal and not a specific type.
I have in the last two weeks viewed a number of two bedroom townhouses. These are my bread and butter. The perfect beginner to moderate investor property.
I’ve also looked at a mixed use shop and apartment and a 5 room student rental. Rather than an exact type I look at what I can bring to a deal and what I can personally do to increase value/cash flow as quickly as possible. I don’t care how I do that.
For example, I buy with no chain like most investors so I tell agents to call me in if a sale has fell though and the owner wants a quick sale that won’t fall through. I save to deal but I negotiate a fair price reduction to do this. In a student setting maybe a house is cheaper as they have not secured renters for next September.
I have a great network with landlords and the University so I can buy with a reduced price and less competition and instantly rent it. So although I’m not laser focussed on a property type I am laser focussed on a good deal.
Tell us about your biggest mistake in real estate?
Bad mistakes …… I’ve made a few….. so although I’ve made lots of smaller mistakes I don’t think I’ve really dropped any major clangers. I’ve been investing for 10 years and only really started scaling in the last 4.
I guess my biggest mistake looking back was not going all in 10 years ago. Hindsight is a wonderful thing. I could be a lot further along my journey of which there is a clear end goal if I made some more serious moves earlier but I spent that money travelling and seeing the world so it’s not money wasted but in an investment sense it was.
I’ve missed some great deals when my focus has been off. That won’t happen again. In negotiations in the early days I got hung up over small amounts of money. I now zoom out and ask myself if that amount will mean anything in 20 years. This doesn’t mean I’m reckless in the negotiation but I won’t loose a great deal by digging my heels in for the sake of £1000.
Tell us about your biggest win in real estate?
There are a couple that stick out. I stumbled into house hacking and then into HMO student rentals with my first foray into investing. Being one of the most lucrative models I suppose my biggest win is to have got a great cash flowing rental up and running with little strategy or knowledge in the first year or so.
I relied on networking and being personable to get through and it worked well. My 2nd purchase was a much more rounded investment as I had worked hard to get my reps in and understand the process. I negotiated well and got it at a great price. Rented it quickly on a good yield and have watched it raise in value by 50% in 5 years so I count that as a serious win.
I honestly feel like my Twitter engagement will be the big win going forward. I have conversations with mentors I would have to pay thousands for for free in DMs. I am also looking at ways to expand Side Hustle Houses as an investment fund GP as well as exploring course making and consulting in the future.
Within my job I teach teachers how to teach (quite the mouthful) and think I can offer a lot on the mentor side of things for people starting out.
Outside of real estate what else do you invest in?
Real Estate takes up a high proportion of my investing, I believe in the fundamentals and quite frankly understand it better than many other things. I invest in a Teacher Pension which is a good long term investment for me as a teacher.
I dabble in Stocks, Index funds and Crypto but this is a very small net worth percentage and honestly something I’m not very good at. I also stack money in my ISA, which is similar that a Roth IRA.
Unlike some I don’t horde all of my money like Scrooge Mcduck (for those that get the reference) I have a young family and like to travel as well as give my kids great experiences. As cheesy as it sounds investing in my kids happiness means much more to me than all of it.
Books people should read before investing
There are the ones always floated around such as Rich Dad Poor Dad, which I did enjoy. Also The Almanack by Naval. It’s a free download which is always nice. These are more principals of investment advice but they certainly helped me build belief in the process that, at times, you need.
I have got a lot from the Podcast, Property Hub which one of the presenters Rob Dix has a number of books if they are your preferred vehicle of learning. I’m much more a podcast and course guy.
What advice would you give to a new investor?
There are so many small things but really the advice would be to educate yourself. There are so many free and cheap courses around to learn the ins and outs of basic investment. If possible get along to a meet up or networking opportunity.
For example a Student housing fair if that’s your market and just talk to people. I’ve done well out of taking time to get to know agents and remind them what you’re looking for. Most importantly of all when you are educated and done your homework just jump in. Every deal has something that is less than ideal. It’s about getting skin in the game getting amongst it.
I went for it with the darker kitchen only biggest reno 5 years ago. Still holding up well. Pictures on the thread of the before.#property #RealEstate #renovate pic.twitter.com/yNsaO343xf
— Side Hustle Houses (@SHHouses) May 28, 2022
https://twitter.com/SHHouses/status/1526997753578065922
Great 🏡 in great locations will bounce back first from any ‘crash’
Solid assets will always have demand and command a premium.
Don’t overpay for sub standard in this market.#property #realestate #propertymarket
— Side Hustle Houses (@SHHouses) May 18, 2022
Enough Business
As many of you know I live in Chicago. A beautiful city that is especially beautiful for about 5 months. Coincidentally those 5 months can get pretty hot and humid. Meaning my brick one bedroom apartment requires a window AC to make it habitable.
Last week I spent some time researching the best and cheapest window AC unit. To my surprise I was able to pick one up for $170 on Amazon. I felt pretty good about the purchase as most window units start at $250.
This week the window unit arrived – finally some relief! But after 10 seconds of being turned on it died. I found myself with a likely fire hazard and the new chore of returning a 30 pound door stopper.
The lesson that I’m taking away from this situation is that going the cheapest route is not always the best option. Especially when it’s vital that the job is done right.
As investors we often get caught up in how things look in our spreadsheets. The cheapest option looks good in the moment but could end up costing us down the line. For example going cheap on cabinet hardware is a much safer bet than going cheap on a new roof (unless it’s a luxury rental).
The old saying that you get what you pay for is usually correct. As investors we need to make the judgement call on when to go cheap and when to just buy that $250 window unit.
See you on Tuesday
