I met with a great mentor and inspirational real estate investor, Chuy Terrazas. Chuy owns over 200 units, mostly in small multi-family deals in Houston.
Brian: The other day I gave Chuy a call and he asked me how everything was going. I told him that it was going great and that we’ve purchased seven houses this year. However, we had really hoped to do two a month, which should have put us at 14. Chuy would you share with them what you told me?
Chuy: Well you were telling me that you’d only done seven in seven months and I just remember thinking, “That’s great!” Seriously, how many did you do last year?
Brian: I didn’t do any last year.
Chuy: Well there you go- you went from zero last year to an average of one a month. That’s pretty cool. But at the same time, I know exactly how you feel. You’re playing big. You’re out there on the court and you set these great goals. But that’s just part of it. It’s happened to me. It’s like shooting for a double and ending up with a single. Let’s celebrate the single. It wasn’t a strike out. And even if it was, there’s lots of strikeout dudes out there making a lot of money anyway. It beats being a critic on the sidelines and not being on the court at all, doesn’t it?
Brian: That’s absolutely right, and it made a big impact on me. I bought my first house 5 years ago. Then it took me 5 years to buy my second house, and now I’m buying one every month. It had become a kind of mental block, but now since I’ve gotten over that we actually have two houses under contract for this month.
Chuy: That’s great! So what are you doing to these houses? Are you fixing them to resell or are you renting them out?
Brian: Well we typically fix them up, hold for a year with a tenant, and then after year one put it on the market. So hopefully about 13 months after we buy it we can sell it, get the equity out, and then put it into another house.
Chuy: Cool! And if lending times get a little better and you want to keep the house, you could even refinance and get some money back to invest. Now is not such a good time to do that, but at least you’ve got some options. So what’s next?
Brian: Keep buying houses! We’re getting a lot closer to two a month now. The flood gates have kind of opened up- we’ve got deals and financing has opened up. The pieces are definitely starting to come together. Hopefully, before long we’ll be jumping up into multifamily with you.
Chuy: Cool- well I have some advice for you. You know how you were going for two a month but ended up with one a month? I would challenge you to say let’s go for four a month. I’m going to do one a week. What needs to be in place for that to happen? How am I going to find more properties? Where am I going to get those sellers from? What do I need in place in terms of infrastructure, people who are helping me in the office? So if you go for four a month, you’ll probably fall short and end up with two a month, but at least you’re ready for more.
Say hi to Chuy on his blog: AskChuy.com.