Most people have someone who’s made a positive difference in their life. Real estate investors are no different. This Best Ever Influencer series will take a look at how real estate investors have influenced a fellow investor – and how the act of influencing changes both parties.
The inaugural article looks at Alex Holt, a beginning investor eager to learn the ropes, and Ash Patel, a Cincinnati commercial real estate investor who is showing him the way.
Ash Patel (left) and Alex Holt (right)
Sometimes one piece of advice – just a tiny suggestion – is enough to profoundly change someone’s life. And like a well-timed crash of cymbals at the symphony, the recommendation must arrive at the precise moment to affect change.
Take Alex Holt and his Cincinnati landscaping business. It was hard work (grunt work, some might say) but his business was doing OK; he even had a couple of employees during the busy season.
Yet deep down Alex knew there was more out there for him than mowing lawns.
It turns out that “more” was right in front of his eyes every day. Literally. “I would say three or four years ago the light bulb went off: ‘Hey, you’re making these houses beautiful on the outside – you should see about the inside,’” Alex said.
After talking with some fix ‘n’ flip investors whose yards he maintained and YouTube-ing real estate investing, Alex decided, “Man, I can do this!”
And that’s how Alex became interested in real estate investing.
But being interested in real estate investing is not the same as having the time to get good at it, as Alex was soon to learn.
You Reap What You (Don’t) Mow
Although he didn’t know it at the time, Alex needed some big picture advice, something that would allow him to climb down off his riding mower and chase after his dream. The man who delivered it was commercial real estate investor Ash Patel, who Alex met at a Joe Fairless Cincy Best Ever Real Estate Mastermind Meetup.
Ash is a second generation American from Indian parents. Even though the money was good, Ash grew tired of being in IT, realizing that the only reason he entered the field is that it was expected of him.
Alex is all about the work, the grind to get things done, yet Patel’s first piece of advice to his new mentee was to grind less and know your worth. The suggestion caused him to step back from his landscaping business and reassess it. He realized his value was worth a lot more than being a $12 an hour lawn mower.
So he took Patel’s advice to pay someone else to mow lawns and moved the business closer to more lucrative clients.
Once the duo decided they wanted to work together, the question became how to start the partnership. Should they dive in headfirst and buy a commercial building? Or be prudent and start small? Prudence won out.
Alex and Ash thought they were choosing the easy way to begin their collaboration by buying a $9,000 fix ‘n’ flip opportunity (Ash fronted the money) in a not-so-great area of Cincinnati’s Price Hill neighborhood. What they could not have known that a year-long series of serious issues with the property would cause it to turn into…
The Nightmare on Elm Street
The problems that Alex and Ash ran into were so numerous as to be almost comical. Stephen King couldn’t have designed the horrors that the duo had to endure with the seemingly cursed piece of property.
Alex’s tedious game of whack-a-mole with an array of major problems went on for more than year. “It was like every time we fixed one thing in this house, something else broke because it was 100 years old,” Holt said.
Instead of a “For Sale” sign, the house should have come with a “Buyer Beware” warning label. They bought the house knowing it had several code violations and “tons of issues” with inspections, Ash said. Adding to the challenges: the house’s owner was in jail (he was later deported), creating more delays.
Alex, who has an earnest way of speaking and a slight Southern accent despite being Cincinnati born and bred, spent countless hours at the house.
“We ended up pretty much gutting and rebuilding the entire house,” he lamented.
First came a new roof. Next was a new furnace. And the constant inspections played havoc with their deadlines – and their budget.
The worst part? Since the house was not in a desirable location, a Class D area according to Alex, they probably wouldn’t recoup all of the money they put into the house.
Just when they were about to sell, the unthinkable happened. The incredulity was apparent in Ash’s voice as he explained.
“And then, when Alex had finally sealed the deal and found a buyer, it turns out our house is six inches over the property line,” he said. So instead of being to sell the albatross of a house, the duo was forced to hire a lawyer and try to find a quick solution. The neighbor decided to play hardball, reneging on an agreement to settle the issue for $1,000.
That solution was an easement rights agreement giving Alex and Ash the six inches in exchange for $1,400 cash. “And I had to drive two hours at 10 o’clock at night to meet him or else he was going to be going away and we couldn’t see him for weeks,” Alex said.
With the last obstacle cleared, they were finally able to sell the house for $37,000. Considering everything that happened, losing only $8,000 on the house could be considered a moral victory.
These things never happen to Jonathan and Drew Scott on Property Brothers. “Yeah,” said Alex. “It was not supposed to be anything long and dramatic.”
That the experience was long and dramatic may have cemented the pair’s future working relationship.
You’ve Got a Friend in Me
So after a nightmarish deal on their first try, the million dollar question is why would Ash continue to partner with Alex? One reason could be that Alex’s first stab at real estate reminded him of his own stumble-filled initial endeavor. As a way to offset taxes, he bought a run-down, three-story, mixed use building and discovered it needed major repairs.
“I had no idea what I was doing,” Patel said.
He figured it out eventually, but it was a painful learning experience. The willingness to help others avoid that type of struggle may have had its genesis in that brutal first deal.
“Because of all the mistakes I’ve made and learning things the hard way, and because I didn’t ask for a mentor, I overly exert myself out there and I’m willing to mentor anybody that wants to learn from me,” he said. “One of my rules is I will match your effort.”
He’s found a willing pupil (and partner) in Alex, who yearns to prove his worth to his mentor. Ash hasn’t just influenced Alex’s real estate career – he’s helped shape his life by showing him how to think differently, perhaps more strategically, about the world.
Alex is just sick about how what was supposed to be a quick deal dragged on for more than a year. He’s stunned (and very grateful) that Ash is still willing to work with him.
“It’s one of those things that before you go to bed at night it haunts you – and I mean that literally,” Alex said.
“It’s also a deeper connection,” Alex added. “You know, I would say he’s a friend. I know his family and we’re tied in in different ways so it’s personal.”
For his part, it’s obvious Ash admires the way Alex has managed the chaos surrounding their first deal. Despite the sinkhole of time that the house turned into, Alex never wavered in his commitment to the deal – or to Ash.
“There’s no money to be made anywhere here for him, but the fact that I was willing to take a chance on him and the fact that I’m losing money on this house, he just stayed in there and continues to just work,” Ash said.
So, despite not making anything on their first deal, would Ash do another deal with Alex? Yes, he said without hesitation, but with a “little more oversight. Because I know that he’s already proven that he’ll just continue to work, he won’t give up, and he’ll do whatever it takes to get things done.”
And the next thing to get done is another deal. Alex and Ash are looking at purchasing a 3 bedroom, 3 bathroom house for $60,000, putting another $35,000 into it and hoping for a sale price in the mid $140,000s. This time, with Ash’s influence, the landscaper turned real estate investor thinks that he has learned enough that it won’t take a year to sell it.
Written by Robert Springer, an Oregon-based freelance write. He has more than 10 years’ experience writing about real estate investing. Say hi to Robert at email@example.com.
Are you an accredited investor who is interested in learning more about passively investing in apartment communities? Click here for the only comprehensive resource for passive apartment investors.
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.