Henry Lai always knew that real estate would be more than just a passion project for him. So in 2018, he started his own real estate company while also working a demanding full-time job. Identifying his skills in developing corporate strategy and management consulting, Henry noticed that there was an opportunity for him to take these essential skills he’d learned and apply them in the field of real estate analysis.
His first investment began like many others — with a traditional house hack. After quickly realizing that this model had many benefits, Henry was able to apply the lessons he learned to additional investment opportunities.
“I mostly learned that being a landlord was quite a hassle and a lot to do, especially being out of state. Though, I would still start my journey by house hacking. You can learn a lot by being a single-family landlord,” Henry said. “I would even say instead of single-family house hacking, depending on the market that you’re in, I would probably get a fourplex because you learn a lot by managing a fourplex as well.”
Looking to grow his portfolio beyond active investments, Henry started attending real estate meetups and conferences to expand his network and identify potential mentors. After more than a year of attending different networking groups, Henry developed a deeper grasp of the advantages and disadvantages of various investment types. He then took the leap from single-family to multifamily and passive investing.
“I started learning more about multifamily investing, just kept networking with folks, started going to real estate conferences, and in doing so, I met a lot of folks who were doing multifamily real estate. I started thinking, ‘Well, you know what? I want to take more action than just passively investing,’” Henry shared. “I was passively investing in other people’s deals, but I was hoping to learn more about it and get my hands dirty and be part of the managing group. Through this, I was able to not only get into a number of passive investments but also become a general partner in six different deals now.”
As Henry has continued to grow his real estate business alongside his full-time career, building relationships has been critical. In addition to the connections he formed in the networking groups, creating partnerships with syndicators and other investors is pivotal to the success of both active and passive investments.
“Just like in most other business ventures, I think trust is so important,” Henry said. “You never really know how a real estate partner is going to be until you get into a deal with them, so I would advise developing that relationship over a number of years, a number of situations, and starting small in partnering with them rather than just getting into a large deal with them.”
Another relationship that is influential to Henry’s real estate investments is the one he has with his family. When he evaluates a new investment, he carefully considers the impact of a deal on his availability to his wife and two young children.
“I want an investment opportunity where I can be there and back in a day so that I can leave in the morning and then come back at night and still spend it with my kids. So I try to spend as little time away from my family as possible,” Henry said.
Throughout Henry’s real estate journey, he has learned the value of delayed gratification. Henry transitioned from investing in properties that deliver immediate cash flow to opening his portfolio to the less traditional real estate deals like new construction that may provide a return in years to come.
“Now, my lifestyle doesn’t really change if I get money immediately versus in five years, so I have learned to be a bit more risk-taking,” Henry said. “Sow your seeds today so that you can harvest in the future. A lot of investing is delayed gratification and remembering that delayed gratification actually helps people succeed.”
About the Author:
Leslie Chunta is a marketing consultant with nearly 15 years of experience in creating dynamic marketing programs and building brands for startups to enterprise organizations. She has worked agency- and client-side with high-growth companies that include Silicon Valley Bank, JPMorgan Chase, SailPoint, EMC, Spanning Cloud Apps, Ashcroft Capital, Netspend, and Universal Studios. www.thelabcollective.com
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.