533: Building a Successful Real Estate Investing Business

SHOW NOTES FOR EPISODE 533: BUILDING A SUCCESSFUL REAL ESTATE INVESTING BUSINESS

Last week, our guest discussed invaluable tips for cost-effective and profitable renovations.  In this episode, Van Sturgeon continues sharing renovation tips and gives an insider view of the strategies he used to grow a successful, multi-company, real estate investing dynasty.

What You Will Learn

• Why it’s better for you to manage your own renovations
• How out-of-state investors can manage effective renovations from afar
• The most important first step you must do BEFORE you begin to renovate a property
• Handyman vs. contractors
• How to successfully grow your real estate investing business as your portfolio grows
• Who to hire first in your real estate business
• How to let go and let others manage your business – especially if you are a control freak!
• The single most important decision he made that made his business a major success

About Our Guest

Van Sturgeon

Van Sturgeon is an experienced entrepreneur who has successfully created several businesses in the real estate industry including land acquisition, development, construction and renovation.  He personally owns over 1,000 properties across North America, and is semi-retired from the day-to-day operations of his businesses.   Van is also passionate about helping homeowners and real estate investors to overcome their fears of property renovations, and he loves to be actively involved in helping people reach their goals.  Van has also been featured in The Los Angeles Tribune, The Ritz Herald, The Hudson Weekly, Madison Graph, Lincoln Citizen, Belmont Star, Yahoo News and Yahoo Finance.

…Continued From Part-One

Managing Your Own Renovations

• Van believes all real estate investors should manage their own renovations for two main reasons:
  1. To Save Money
     • The reason we are investors is to make money
     • If you are managing your own renovations, you can save 30-50% of your total renovation costs (which would generally go to general contractors)
     • The money you save would seriously help propel you on your real estate investing journey
  2. To Make Better Investment Decisions
     • If you are better able to understand the mechanics of the whole renovation process, it puts you in a position to move forward with future properties knowing…
       • what you can do to add value and
       • know how much it should cost
• If you are an out-of-state investor
  • Of course, it will be more difficult to manage the renovation process not being there to see everything
  • But you can still apply basic principles and fundamentals – they don’t change just because you’re out-of-state
  • You need to create a framework of how your interaction with contractors is supposed to play out
  • You still need to:
    • Establish goals
    • Validate those goals
    • Evaluate how much you have to spend
    • Develop a budget
    • Finance the project
    • Develop the “scope of work”
• Van feels you should be in the GC role
  • Hire your own electricians, plumbers, painters, etc.

 Handyman vs. Contractor

• Van says that when you are doing a significant remodel – $50,000 plus – that you should only hire professionals
• Quick fixes, cosmetic and light rehab is OK for a handyman but, with expensive projects, it could be too risky
• A professional, experienced contractor can do a job faster and more efficiently, more effectively because that is all they do
  • They have the right tools
  • They won’t have to re-do something
  • You’ll get higher quality work
  • Ultimately, you’ll save money with the professional because time is money

 Managing Multiple Businesses

• Van never planned to own multiple businesses
• He went into general contracting because he had lots of experience in that area
• His business continued to develop and grow
• He kept running into people who were acquiring properties and growing their portfolios
• Then he started to acquire and develop properties for his own portfolio
• As he became a successful real estate investor and his real estate holdings grew, he saw the need to manage the properties himself, instead of having third parties do that like he did in the beginning
• So he started a property management firm to manage his own properties and perhaps even manage others
• He never set out to form multiple businesses
• It happened more organically, out of necessity
• He found good people he could trust to run these businesses as well
  • They ran the businesses well
  • He compensated them well
• His role was as more of a visionary and his leaders would work out the details, nuts and bolts, of operating the businesses successfully
• He continued to provide oversight but he was free of the day-to-day operations of the businesses
• The biggest challenge was letting go
  • He’s an A++++ personality and a micro manager
  • He felt he was the only person who could do the job best
  • However, he got it in his own way of progress
  • It wasn’t until he hit a wall, that he could change the direction he was going
    • He was sleeping in a house, waking up in the middle of the night, staring at a freshly painted ceiling
    • He had an onslaught of emotions regarding the job he was doing
      • The plumber didn’t show up
      • The electrician wanted early payment
      • The kitchen manufacturer didn’t show up on time
      • He knew he couldn’t keep doing this!
  • He reached out to a local real estate investor he knew who was very successful and had a beautiful portfolio of properties
    • Van hired him to help him get out of the mindset that was hurting him and his business
    • He was more than willing to help Van
    • Van knew that success was a matter of mindset
    • Van knew he had to disassociate himself from the business because he was getting in his own way
    • So now, he is working ON the business not IN the business
    • That was a major transformation in Van’s life
    • He believes God brought this person into his life at this particular point
    • Because of that person, he was able to experience the success that he has now
  • He also recognizes that you have to set the major goals for your life on where you want to be in 5-10-20 years down the road and. everyday, work a little toward achieving those goals
    • This is what was taught to Van by his mentor today in his life
    • Van has a passion for what he does — he loves his work and is gifted in what he does
    • He is also thankful for what he has

The Value of Knowing and Delegating to Good People

• To make his business a success, he’s had to rely on other people
  • A good coach
  • Good managers and employees
  • Experts in key areas: attorneys, CPAs, engineers, electricians, etc.
• Sure he has made some bad choices in the process but that is just part of the process
• And you don’t have to just hire them as an employee, but you can bring them in when you need them
• It’s about aligning yourself with key people who are good in their field, who are interested in seeing you succeed and vice versa
• For example, he has top real estate agents and brokers he knows who:
  • Know what he’s looking for in terms of properties
  • Know that he won’t waste their them if they bring him what he is looking for
  • Know he won’t cheat them
• You need to trust and rely on the right people to move forward

Biggest Mistake

• Not sticking to what he knows best
• He realized that the times where he did not do so well was when he strayed away from what he knows best – real estate-related businesses
• When he stayed focused on real estate-related businesses (renovation, property management, real estate investing, etc.) he does best

Biggest Success

• Getting a coach – the most important decision he made for the success of his business
• Learning about the importance of setting goals, having the proper mindset and moving forward in that mindset

Advice for Old Dawgs Looking at Real Estate Investing to Help Them in Their Retirement Years

• How old you are when you start investing in real estate is irrelevant
• The time it takes to find a property, do the due diligence, sell it or hold on to it takes very little time
• What’s important is just buying the right property – the money is made on the buy!
• Don’t rush in to just buy something
• You aren’t going to find many deals on the MLS
• Your first investment should be on yourself – educate yourself first!
• Find a good mentor or coach
• Open your eyes to the great opportunities in real estate investing – for all ages!
• There are still great areas out there!
• He has relationships with individuals that send him good deals all the time
• You can create those same relationships on your own
• Find a good market and if you are driven and passionate, you’ll find the good deals!
• There are opportunities all around you
• But it requires work and dedication
• Real estate investing is not for everyone
• You have to work at it if you want to succeed
• It’s like anything in life – if you want to succeed, you have to work hard at it!
• If it was easy, everyone would be a successful real estate investor
• His life was not easy!
• He cleaned many toilets, slept at job sights, he’s got scars from renovation accidents
• You need to get out of your comfort zone to get to the next level
• There are lots of opportunities, if you’re willing to look for them!
  • Properties you can purchase for no money down through wholesaling

Looking Forward

• He is at the stage in his life where he has achieved financial success not only for himself but for future generations in his family
• He is not driven by money
• He is now driven by the interaction he is having by helping others to help themselves
• He loves engaging and working with people
• If he can uplift people and their families it brings him great joy
• He loves real estate and he loves sharing his 30 years of experience with others
• The fundamentals of real estate has not changed in the last 30 years
• Regarding his business, he is just going to continue what he has always been doing
  • He may move into different markets – the north is moving to the south
  • He may streamline his organization a bit

Coaching

• He wanted to consciously take a step back from the day-to-day operations of running his businesses and to take it easy, “stop and smell the flowers,” down shift and enjoy life more
  • During that time, he had friends come to him to ask for help with renovations
  • He also met with a real estate investor, who was also a coach, who told him that there is a big need for people to know about renovations
  • He realized that there was really a need for many real estate investors to learn about the proper way to renovate
  • He had always helped friends and family but thought maybe he could help others by starting to coach specifically on how to renovate on time, on budget and with quality
  • Only for the last 18 months, he has been more formally coaching others

Rap-It-Up

• Favorite real estate book: Rich Dad Poor Dad by Robert Kiyosaki
• Favorite business book: The Wealthy Barber by David Chilton
• Most valuable web site for success (other than your own): BiggerPockets.com
• Favorite quote: “In war, there is no substitution for victory.” by General MacArthur and Van adds, “Attack, attack. attack.  Never retreat.  But if you ever have to retreat, prepare to attack again.”
• If you lost everything – all your assets – and had to start all over, knowing what you already know, and you only had $1,000, what would you do to launch your real estate investing business?  I would use the $1,000 to invest in education by paying someone to give me a clear path from where I am to day to where I want to be tomorrow. Or, use the $1,000 to learn wholesaling or attend REI meetings to find people to help me learn how to find great properties without money.  I could find people who are struggling that I can help and make money at the same time.  That would be helpful to not only find your first properties but it would benefit you in the rest of your real estate investing career.

How to Reach Van

• Website: VanSturgeon.com
  • He has a free training available on his website as well

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