FEATURED STORY
Master Investor
“AREI does not put our clients in bad positions,” is the mindset for Larson and the entire team.
there let’s explore some more options.’ But yeah, most of the time I say eight out of 10 people come back and invest with us again,” Larson says. LESSON LEARNED: AVOIDING HEADACHES One of the hallmarks for any suc- cessful person is knowing what he or she is not good at. Larson’s experience with Class C homes in and around Detroit taught him to avoid that asset class as those kinds of homes provided more pain than pleasure. Even though he knows people in Detroit who are doing well owning and managing 20 or 30 rentals, he realized that hands-on management is not part of his skill set. Larson’s just not cut out to be a property manager — and he’s OK with that. “So I learned at that point, if I’m going to have an investment company, a real estate investment company, I prefer
to avoid those types of investments because my investors, they’re not man- aging the properties themselves. They’re relying on me to manage them. I’m going to manage the stuff that I know is going to work and the stuff that I know is going to make my investors success- ful,” he says. He won’t invest in anything that produces less than $1,100 in rent, even though he’ll provide properties with rents down to $950 if his customers ask for them. “I have those investors who understand that is the risk that is asso- ciated with those, and they want that type of inventory, so I’ll still produce it,” Larson says. Larson knows he doesn’t have that type of risk tolerance, so he avoids the asset class. “I’ve just learned in my experience that with $1,100 rents and above, you’re starting to deal with a better quality of tenant. You’re buying in better neighborhoods,” he says.
In Class A neighborhoods, the houses are easier to lease and keep them leased, Larson says. “We just have more success down here in Dallas. It’s because the median rents are at $1,600,” he says. Larson foresees a time when Dallas real estate prices will rise enough that rents won’t be able to keep pace, making the math no longer pencil out for the company’s Class Amodel. He likes many Florida markets, especially Tampa Bay. Oklahoma City is also a possibility. “Basically, we’re going to chase whatever the hottest market is,” he says. John Larson has become successful by focusing his company on a class of invest- ments that he knows will pay dividends for his investor clients. That, and a relentless focus on his clients’ needs, have helped make him a Master Investor. •
Robert Springer is a regular freelance contributor to Think Realty Magazine. Contact him at rtspringer@gmail.com.
24 | think realty magazine may :: june 2017
thinkrealty . com | 25
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