Good morning,
Boy oh boy – the water is getting choppy out there. Plenty of craziness is beginning to hit the real estate market:
- Rise of adjustable-rate mortgages (9% of last week’s mortgages were adjustable)
- Mortgage refinances are down 70% year over year
- Wells Fargo is conducting layoffs in their home lending division
As investors we thrive in choppy water – always looking for opportunities that come up from the volatility. Granted we’re doing the work, buying great deals, and using conservative leverage.
I’m excited to share one such investor who is doing the work. It is my pleasure to introduce you to Davis (@DavisMichaelse1)!
How many doors do you have?
Currently I have 7 doors. We own 3 duplexes and 1 single family home. Two of the doors are short term rentals and the other 5 are rented long term (for now)
What got you into real estate investing?
I realized most of the wealthy people I met had their hands in real estate and I decided to learn how I could break in to the business.
What market(s) do you operate in?
Northwest Arkansas and Charleston SC
How would you describe your portfolio?
Small multi family with a single family home.
Our original strategy was to buy small multi family where we could build sweat equity and get long-term renters. After some encouragement from investor friends, we decided to try out a short-term rental approach in one of our units. It’s been about 5 months since we made the switch and it has exceeded expections by a lot! We’re pivoting our search to be much more STR-friendly now because of that.
What are you currently buying?
We are looking for single family homes that we can build an ADU on. We’re also interested in country homes with acreage that we can build out additional units. We’re moving more into short term rentals.
What’s your biggest mistake in real estate?
We bought a duplex to remodel with renters in it. One of the renters was moving out, and one wanted to stay and move in to the remodeled side. We started the remodel after the first renter vacated. Somewhere during the remodel the renter that planned to stay decided she didn’t want to and then began sabotaging our contractor every day — calling the police, the utility companies, anyone who would listen. It was a total nightmare. From now on we’re not keeping anyone on the property while we start remodeling, no matter how ok they say they are with it ahead of time.
Tell us about your biggest win in real estate?
Getting started! Our first property was a total wreck, but we got through it. The investors we knew from our local REI meet up were really helpful when things got tough with contractors and tenants.
What else do you invest in?
Index funds mostly, but starting to look at small businesses as well.
Books people should read before investing
Building wealth one house at a time
ABCs of Real Estate
What advice would you give to a new investor?
Start learning how to underwrite deals. Listen to the “famous four” of bigger pockets. Talk to investors at your local meetups about what deals they’re doing. Put something under contract and look at the numbers alongside that person.
Getting confident with underwriting a deal was critical for me to feel comfortable taking the leap.
Davis (@DavisMichaelse1) | TwitterThe latest Tweets from Davis (@DavisMichaelse1). Repeat house hacker learning the STR game | Grocery retail scientist by day. Bentonville, AR twitter.com
Enough Business
As some of you know – my personal Facebook + Instagram was hacked earlier this week. This has been a terrifying experience…
The notion of someone mascaraing as me has been compounded by the fact my account was deleted. Meaning I have no optics on what was done, said, posted, or shared…
Only hearing about it when people said they couldn’t find me.
The point I’m trying to make is that as investors we need to take precautions. Buy insurance, get an umbrella policy, use an LLC, use two factor authentication, have a password manager, etc.
Otherwise you might find yourself staring into space
See you on Tuesday
