Real Estate Investing – Snapshot of Experience
Introducing Real Estate Investing at Trietta
Happy New Year! As we welcome a new year, a new set of goals will be set by all. If any of your goals relate to real estate investing, we invite you to follow our blog throughout 2019. Whether you’re a seasoned investor or newbie you will find value in the information shared. At the core of Trietta, is educating those who love real estate – through our community and experience. Real data, real facts and real stories will be shared. No fluff and no get rich quick gimmicks.
Trietta’s Real Estate Investment History
Trietta has been investing in real estate in Connecticut since 2010. Since then, we’ve completed over 20 real estate investment projects, varying between buy and hold and flips. The very first project was a multifamily foreclosure that was a complete rehab, that is still held and rented today. After successfully completing this first project I immediately obtained my real estate license sensing an opportunity to combine my experience and resources from my general contracting business to real estate investing.
For the next three years single family properties were purchased throughout Fairfield County. The philosophy during this time was to purchase undervalued real estate with value-add opportunity, renovate and sell for below new construction cost. Ranch style homes in need of major renovation were targeted so a second floor could be added on and the entire house renovated. Building up is much more cost effective than adding on and with Trietta’s community of real estate professionals we were able to turn these projects around quickly (4-6 months). These projects were completed with private investors and all returned profits, although those profits declined steadily as the years went on.
Warren Buffett once said that as an investor, it is wise to be “Fearful when others are greedy and greedy when others are fearful.”
The reason for the decline in profits was easy to identify. As the real estate market improved the purchase prices were increasing, while the sale price was staying flat. Along with an improving real estate market, lending was becoming easier to obtain from both banks and private investors. Confidence was high in real estate during this time and while many doubled down, buying more, I decided it was time to take a step back. The last two properties purchased had over ten offers each. As a real estate investor, you must make logical decisions, not emotional. When bidding against this many people consistently someone will become emotional and will overpay for the property.
Get Out of Your Backyard
Over the next two years or so zero properties were purchased. Instead, the time was used to develop a database and system that would allow us to navigate through the real estate market accurately and efficiently. A database was created and every town and city in Connecticut was researched. It’s important to emphasize this, every town and city – not just our backyard anymore. The data was staggering and as I was told by a great mentor early in real estate investing – the numbers don’t lie.
Logic Over Emotion
Emotions will allow investors to manipulate a property to make it seem better. An emotionless database that tells you how much to pay for a property based on real facts is powerful. That was what was created and is used today. An emotionless database tells us what properties to pursue and for how much based on facts and data.
Creating a Business, Not a Hobby
Along with creating a database during these two years a system was also initiated. The most powerful part of the system that we created was a time tracking feature. The database and system were being worked on in tandem, so we could accurately estimate how much time it would take to locate, purchase, renovate and stabilize the investments. It was concluded that time is by far the most important measurable in scaling a real estate investment portfolio. Time is one of my favorite topics in real estate investing and to stay on track I will take a deeper dive into time and real estate investing in a future post.
Time to Buy Again!
Fast forward to 2015 – buy and hold, along with flip opportunities were attainable again (per our standards). Not only attainable, we were (and still are) doing multiple projects at one time. No more ridiculous bidding wars with investors that were willing to overpay just to do a project.
The Current Trietta Philosophy:
Purchase undervalued real estate in active markets, repair and upgrade property, maintain the property if leasing and exit once target returns have been satisfied.
Important to note – it’s okay for your philosophy to change with current market conditions. The cycles of real estate will never allow one philosophy to win forever. To maximize your returns, you must adjust accordingly.
Trietta’s 2019 Goal
To close 2018, five properties were purchased in the last two months and our goal is to carry this momentum into 2019 with a goal of twenty real estate investment projects for the year. We will update the blog with case studies and provide updates on social media. What’s your goal? We are offering a free one-hour consultation, with no further obligation, to hear what your goals are. Whether your brand new or a seasoned investor, we guarantee to provide value to your real estate investing.
If you want to be one of the few that invests in Real Estate and not one of the ones that just talks about it contact us today at 203.246.2782 or email us – we would love to talk to you!