UPCLOSE & PERSONAL
ONE-TO-ONE
AHost of Good Advice INVESTOR AND PODCASTER JOE FAIRLESS OFFERS HIS “BEST ADVICE” FOR MOVING FROM SINGLE-FAMILY FOCUS TO BIGGER PROPERTIES.
by Robert Springer
J
and figure out creative ways to get into the business. One way that I did my first handful of deals was partnering with a property management company. They brought their own equity as well as investor equity into the deal, and they had the balance sheet from a liquidity and net worth standpoint to get us the best loan terms. And they helped us from a credibil- ity standpoint because they had been around a lot longer as a company than my company. This enabled us to lever- age their experience and balance sheet, raise money and bring our own money into the deal for them. Combining all of that, we were able to close the first handful of deals. What made you decide that multifamily was the best investment fit for you? THINK REALTY MAGAZINE JOE FAIRLESS Because I had been looking at my profit-and-loss statement from my single-family homes, and I noticed that I would make $250 a month on average for each of them, which is great. And then once a tenant moved out, I’d have to pay about $5,000 in make- ready costs before the new tenant would be able to move back in, and that just kills your bottom line for 12 to 24 months, basically wiping all the profits out. So I decided that if I’m going to build a business, I don’t want it to be depen- dent on one tenant staying or leaving. I want to mitigate the risk and spread
it out so that I can make more money while purchasing larger properties and not have that risk factor. I decided to start studying multifamily investing, and I saw that when one person moves out, you’ve got other people who can still stay there, and you could still make some cash flow, so that’s why I went larger. You’ve had a successful daily real estate podcast for years. How did you get started in podcasting? THINK REALTY MAGAZINE
oe Fairless is founder of Fairless Investing and host of the “Best
Real Estate Investing Advice Ever” pod- cast. Fairless Investing controls more than $99 million in multifamily units, primarily in Dallas and Houston, and provides turnkey investments to real estate investors. Joe Fairless also hosts the world’s longest-running daily real estate podcast, which generates more than 200,000 downloads a month. His guests have included Barbara Corcoran of TV’s “Shark Tank” and “Rich Dad Poor Dad” author Robert Kiyosaki. Before setting his sights on a real es- tate career, Fairless was an advertising executive. In this One-to-One conver- sation with contributing writer Robert Springer, Fairless explains how—and why—he got started in multifamily real estate investing. estate background, what was the hardest part of getting started in real estate for you? Your first large deal was a $6 million multifamily unit, right? JOE FAIRLESS The hardest part of getting started was being taken serious- ly as a buyer when I didn’t have the track record for a multifamily experi- ence. I’d owned single-family homes. Having credibility is important within the very small group that is commercial real estate, and so what I needed to do was leverage the relationships that I had THINK REALTY MAGAZINE Lacking a real
JOE FAIRLESS It was an idea from my
JOE FAIRLESS
50 | think realty magazine march :: april 2017
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