Whether it’s running or real estate, Randy Smith always goes all in. For example, when it came to experimenting with triathlons, no standard race would do.
“I had some friends that did it and they talked me into starting, and, just like with anything I do, I tend to go a little overboard. So I went from a 5k run to doing a full 140-mile Ironman Triathlon within just two and a half years. I’m a little obsessive on stuff when I get going with it,” Randy reflected.
With real estate, Randy’s interest piqued just the same. When he first began researching real estate investing, he was ready to go into it full speed ahead. At the time, he and his wife Jenny found they had extra capital, potentially to invest. Randy Smith had been tuning into a podcast from a turnkey provider in Kansas City and decided to purchase a couple of properties.
“I was ready to buy 10. But fortunately for me the provider actually said, ‘Well, let’s just try one or two first before we go too deep,’ and I’m really glad that I listened because ultimately, it was not all it was cracked up to be,” Randy said. “The properties weren’t rehabbed the way that I would have liked them to be, so there were a ton of repairs. Almost every month there was something big that was going on. And this turnkey provider was the property management company as well, and they were not good property managers, either.”
Feeling dissatisfied, Randy Smith and his wife decided to do things their own way. The pair did some research and eventually decided to purchase two properties in Atlanta, Georgia. Rather than step back and let someone else take the lead, Randy and Jenny implemented the BRRRR method: buy, rehab, rent, refinance, repeat. Their hard work ended up paying off.
“Fast forward towards the end of last year, we ended up getting both properties rented out. We did our cash-out refi and we created about $100,000 in equity in one and about $80,000 inequity in the other,” Randy said.
But between the constant flights back and forth from their home in Arizona to their investment properties in Georgia, and all the time they spent refurbishing and managing the properties, Randy and his wife realized the do-it-yourself method also had its hidden costs. Randy essentially felt he was trading one W-2 for another. There had to be an easier way. This led Randy to get involved in the world of passive real estate investment.
“So we’ve invested in five different syndications this year and surprisingly enough, the checks come every month, and there are no tenant calls or property management calls. It’s night and day the amount of work and effort and even the reward, quite frankly, on the back end,” Randy said.
As for the future, Randy hopes to scale back his dependence on his corporate job, and eventually let the passive income he earns from his investments take over. Compared to the sales world he’s been in for more than 25 years, passive investing guarantees a lot more consistency.
“I think the ultimate goal is to decrease my dependence on my W-2. You see changes in corporate America that, at the end of the day, you don’t have a lot of control over. I’m a top-performing sales guy, but really, like the old saying is: ‘You go to bed a hero and you wake up zero’ — in sales, you’ve got to start all over every single time,” Randy explained. “Creating some passive income on the side would give me the ability to leave the W-2, when I choose to.”
Passive investing may be the final stretch of Randy’s real estate triathlon, but the race is far from over. He hopes to continue researching, exploring, and investing in the real estate market, and eventually break from the corporate world completely. Randy is a go-getter, and he advises anyone looking for opportunities in real estate investing to do the same.
“I think it’s the advice you hear a lot of times on these: Just go for it. Just keep showing up and just keep doing it. It takes a whole lot of work and education to get going, but once you do, you’ve created a good foundation. That’ll serve you for years and years to come.”
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.