How Ellis Hammond Discovered His Superpower as a Real Estate Investor
Before he got into real estate, Ellis Hammond honed his brand-building skills as a fundraiser in the non-profit sector. When he realized he needed more money to finance his dreams and care for his family, he looked for options in real estate investing. He began his wealth-building journey by reading books and listening to real estate podcasts, including the Best Ever Show with Joe Fairless.
After learning the basics of investing, he dipped his toe in the water with a few single-family properties in his home state of South Carolina. As his confidence grew, Ellis looked for his next challenge, finding it in San Diego, California, where he invested in a duplex. Ellis lived with his family in one unit of the property while leasing the other unit for a profit, but he quickly found the limitations of this strategy.
Getting Started with a “Home Hack”
The “home hack” strategy involves purchasing a multifamily property and then living in one of the units while renting out the others for income. While Ellis made money with his first home hack and recommends this strategy to beginning investors, he discovered its limitations when he tried to scale up his income for a better quality of life.
A home hack isn’t a scalable source of income because it requires daily personal time and attention. To make money with a home hack, an investor has to personally live on the property and handle the maintenance, interior decorating, and landscaping for the duration of the investment.
Ellis first saw the limitations of this strategy while gardening in his backyard. He’s not an avid gardener, he says and doesn’t like shoveling dirt. It occurred to him that, as an investor, he should be using his time and skills more effectively by leveraging his comparative advantage, or what he calls his “superpower.”
The Search for a Mentor
With his talent for networking and fundraising, he knew he could deliver a big value to sponsors in real estate syndication. They often have excellent number-crunching skills and a knack for finding properties but typically lack interest in brand-building. Networking and brand-building were the superpowers Ellis could bring to the table.
While he was confident in his knowledge of real estate, Ellis wanted to find a mentor to guide him through the learning process. He began his search for a mentor by attending conferences and introducing himself to every sponsor he could find. With his outstanding communication skills, it wasn’t long before Ellis found the mentor he was looking for.
Part of Ellis’s superpower is his ability to educate himself simply by reading books and listening to podcasts. To listeners of the Best Ever Show, Ellis recommends two books that particularly inspired him. They’re Mindset: The New Psychology of Success by Carol Dweck and Switch On Your Brain: The Key to Peak Happiness, Thinking, and Health by Caroline Leaf. These books helped Ellis find a winning attitude that has persisted throughout his real estate investing career.
How Ellis Got Started in Apartment Syndication
Once he knew that he wanted to go into property syndication, Ellis got to work doing what he does best: building relationships. He introduced himself to sponsors who could use his networking and fundraising expertise in their operations. His goal was to find a mentor to teach him about investing in multifamily properties while managing his investments and locating profitable deals. He knew his effort would be fruitless unless he could bring significant value to the arrangement, so he extensively vetted each mentor before introducing himself.
Ellis credits his success in real estate to the due diligence he performs before approaching each sponsor. He’s created a checklist for others to follow when vetting property deals for themselves. Ellis explains that, so far, this checklist has helped him avoid bad investments and deals that might have been poorly suited to his strengths. He offers a copy of the checklist to anyone who signs up for it on his website.
Ellis’s Advice About Bringing Value to Property Syndication
The world of property investment is diverse. People with various talents work together to create value in places where none previously existed. For example, Ellis’s first home hack could generate around $100,000 in equity over an 11-month period because it had excellent potential when he found it. He explains that he and his wife “found the ugliest house on the best block in town” and invested their time and money into beautifying it for renters.
As he learned about property investing, Ellis began to understand the importance of using his strengths to bring value to investors and others in the market. With his gifts for fundraising in the non-profit sector, Ellis already had valuable skills to offer a potential partner.
Through years of honing his communication skills, Ellis learned how to speak to people in a compelling and meaningful way. Moreover, he knew how to build a brand while serving an audience with honesty and authenticity. As he educated himself about apartment syndication, he looked for a mentor who could find great real estate investments while making full use of Ellis’s existing fundraising network.
Creating Synergy with Other Investors
During his search, Ellis saw that most sponsors were excellent managers who were comfortable handling daily operations but not as good at networking or fundraising. However, networking and operations management are equally essential functions of any successful property syndication. They require skills ranging from public speaking to bookkeeping, and few people excel in all areas.
In a successful operation, a diverse group of people must combine their strengths to minimize their weaknesses. Ellis uses the word “synergy” to describe this all-important personal chemistry. It’s a harmony of personalities that enables cooperation within a group of people. Ellis found that synergy with a Texas-based syndication sponsor who became his mentor.
With his personal network and brand, Ellis believed he had the perfect pitch for a prospective mentor. He found his niche in property syndication as a communicator and fundraiser, and now he encourages others to discover their investing superpowers.
Disclaimer:The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.