BUSINESS FUNDAMENTALS
FINDING YOUR NICHE
acquisition methods and costs in de- tail, we were able to take a top-level view and find out what models work and what “rules of thumb” could be used to make pricing determinations quickly and accurately. Taking our investment model to another level required understanding the niche of residential renting and property management. We rented to individuals with high credit scores, low credit scores, and government subsidies. The more we rented prop- erties out and maintained landlord/ tenant relationships, the more we realized that there is a lot of subtlety to having an efficient landlord/tenant relationship. The source of income or credit score turned out to be a lesser determinate of the success of a lease
than the relationship built with a tenant. A tenant who is respected and has immediate resolution to physical problems with their property is much more likely to be retained. A tenant who feels comfortable enough to explain why their rent is behind and what the plan is to catch up is far more likely to get back on track than a situation in which communication with the tenant is limited. How you communicate with a tenant and how you handle problems is not written in a procedure manual anywhere. Learning these methods requires combining industry best practices and figuring out how your organiza- tion can deliver them. This is orga- nization-specific and a niche that we became expert in executing. Tracking
performance in any niche is essential. In property management, tracking retention rates, vacancy rates, rent
> Continued on :: PG 96
Charles Einsmann and Sam Jacknin each bring 20+ years of real estate experience, especially in distressed property
sales and development, to Clear Sky Financial. They co-founded Clear Sky Properties LLC in 2005 before co-founding Clear Sky Financial LLC in 2013. Sam owns and is principal broker for Green Dot Realty. Both Charlie and Sam are licensed Realtors in Virginia, and Sam is also a licensed Realtor inWashington, D.C. and Maryland. At Clear Sky Financial, Charlie primarily takes the lead for networking, sourcing new opportunities, and negotiating new deals, while Sam primarily takes the lead for loan closing and administration duties. Learn more at www.cskyfinancial.com.
Developing a Niche WITH SO MANY AVENUES TO PURSUE IN REI, WHICH IS RIGHT FOR YOU? THE ANSWER IS MORE THAN ONE.
by Sam Jacknin and Charles Einsmann
T
o gain the depth of knowl- edge essential to becoming
investment portfolio indefinitely. The market changes and the inves- tor must adjust to new realities and find niches that work with the new market conditions. We have iterated our business model by moving from one niche to another. Initially, we began investing in residential real estate and under- standing the nuances of selling and renting renovated properties. This niche expertise came from repeating the acquisition, improvement, renting
and resale model over and over again. Each time we purchased an asset, we identified the nuances of the acquisi- tion process that made the buy suc- cessful. During each renovation, we tracked the timing and cost associat- ed with each repair. Learning what re- pairs cost in general and then diving more specifically into repair cost at a granular level allowed us to develop expertise on renovation cost control. We didn’t do this on just one project but on dozens. After understanding
successful, it is important for real estate investors to develop a focus. Taking the time to build a deep level of understanding in a spe- cific area is integral to long-term success. Once a particular mar- ket is mastered, the investor can move on to additional areas using the same in-depth approach. This niche approach is iterative. A single niche is insufficient to expand an
24 | think realty magazine :: july / august 2019
thinkrealty . com | 25
Made with FlippingBook Online newsletter