If you are married, you have the potential to supercharge your commercial real estate investing results by including your spouse. In this training, you'll discover 5 tips for investing with your spouse as well as meet a couple who went from 0 to 16 units in just four months by working together as a unified team.
Meet Eric & Aleeha
Eric and Aleeha are Christians and everything in their life, their family, careers and relationships, flows from their relationship with Jesus. They’ve been happily married for 16 years and are raising four strong, awesome young men. Aleeha works for her church, doing finance and administration and Eric works as a sales manager for a company helping veterans and seniors. They have always had the dream of owning commercial real estate, but it wasn’t until Aleeha discovered Commercial Property Advisors that this dream was realized. They knew they needed an experienced mentor and they joined our Protégé Program.
Being married with 4 children and both parents working full time jobs is quite challenging. Once you include becoming a commercial real estate investor on the side, the challenges are even further magnified. But over the 4 months that we've mentored them, Eric and Aleeha have accomplished the amazing feat of buying their first commercial property in just 4 months. How did they do it? They complement each other very well in their skill sets by taking on different roles while remaining unified and moving in the same direction.
A Life Changing Commercial Deal
Eric and Aleeha purchased an apartment complex in just four months! It's a stable property with rent upside potential:
Property: A turnkey 16-unit apartment complex for $900,000.
Cashflow: Since there's no rehab required, the property will cashflow from day one. Although they will make some improvements, they don’t expect to put a lot of capital into the property.
Occupancy: Fifteen of the sixteen units are already leased and the sixteenth will be leased shortly.
Location: It’s in a stable neighborhood with a stable history of occupancy
Rent Upside Potential: The rents are low so there is plenty of room for increasing income. And as you know, as you increase the rents, the NOI goes up, and the property value goes up.
What else could you ask for? It’s a life changing deal!
Converting an Unmotivated Seller
How did they find such a great deal so quickly? They found the deal through our method of contacting the seller directly. However, it started as a text message from an unmotivated seller who was just curious. That text message led to a few other text messages and based on my advice of how to build rapport and move things along, Eric eventually had conversations that led to negotiations, and they made a fair offer. They were able to convert an unmotivated seller into a motivated seller by bringing a solution to a problem the seller didn't realize he had. The seller was able to get what he needed, so it was a win-win for everybody.
During this process of negotiating with the seller, Aleeha kicked in with her strength of gathering and organizing information. At this point I could really see how they worked together as a couple. Eric was on the front end with the seller and Aleeha was doing more of the legal and administrative tasks. From day one they worked as a team, and it was powerful. Eric and Aleeha were very coachable, which made us as mentors more effective. They are great students and follow all the strategies we teach.
Financing the Deal
In the beginning Eric and Aleeha went through a lot of ups and downs trying to figure out how to finance the deal. They tried several options but kept hitting roadblocks. Aleeha said they had to kind of calm down, pray about it, and then decided that raising capital was the best option.
The Protégé Program enabled them to put together a professional presentation for potential investors. Everyone they presented it to was able to see the vision and upside potential of the deal and didn't require much convincing once Eric and Aleeha showed them the presentation. In fact, all the friends and family they approached decided to invest and they were able to raise the capital needed for the down payment as well as extra as working capital for the property. Then they did traditional financing with the help and backing of some of the partners in the deal. Eric and Aleeha have skin in the game with a small down payment, but nearly all their down payment came from investors.
Exit Strategy: Cashflow, Refinance, Sell
Even with rents below market, the property is cash flowing well. And as Eric and Aleeha make improvements and increase rents, that cash flow will be even stronger. They plan to do a cash out refinance in two to three years and pay off the investors. Then after another two or three years of strong cash flow, sell the property in years five to seven.
Secret to Their Success
When asked what the secret to their rapid success was, Aleeha attributed it to 2 things:
- Prayer: “Like Eric said, we involve the Lord and everything that we do. So, we prayed that the method that you trained us in would be most successful, as successful as it could be, overly successful! And it did. We did have other owners reach out to us; but we just couldn't tackle all of those. We believed that the favor of God was on our doings."
- Coaching: “Your (Peter’s) training, your way of coaching us on how to reach out to these owners, multiple ones responded with, "You guys, for being new, you know a lot of things. You seem well coached or trained or mentored or something." We, like I said, we did it by the book and we were knowledgeable. We ate, slept, breathed CRE for months in the beginning until we got the deal and just went forward with that. The seller could tell that we knew what we were talking about, and were well-prepared and well-informed". Eric added, “... had we not gone this route, we would still be searching for how to do it. We were committed to going commercial real estate. We just didn't know how until we found your program. We'd be still trying to piece together how to move forward, and I'm certain that four months in, we would not be owners of a small apartment complex. That's an absolute certainty. So again, yeah, this program is phenomenal. I can't say enough about it.”
5 Tips for Commercial Real Estate Investing with Your Spouse
1. Common Goals
Being unified on your goals and dreams is a powerful, motivating tool when investing in commercial real estate with your spouse. Eric and Aleeha have these goals and dreams in common:
- Leave a legacy for their children. They want to build a business for their sons and teach them a skillset they can use to their benefit in the future.
- Create a family business that other family can participate in.
- Build up a retirement.
- Use their resources for ministry work in their community and abroad.
2. Effective Communication
Eric says communication is key. When investing with a spouse you need to communicate and be open with each other. They didn’t always agree, but they trusted each other and yielded to one another. Aleeha agreed, saying that when they didn’t know how to move forward, they would compromise. She also added that knowing how each of them communicate is important. Her way of communicating is very different from Eric, and they had to learn each others business styles. It was a learning curve, but because their communication skills with one another were strong, it was a little easier to work through those difficulties that pop up.
3. Know Each Others’ Strengths and Differences
Early on they knew there would be certain areas that each of them would shine. Eric has a strength of being a relationship builder, he's the sales and personality on the front end talking to the seller. Aleeha is an information gatherer, gathering documentation, financials, and entering things into the system. They know where each other needs to be in the deal. Eric is a problem solver. Aleeha handles the fine print and deals with the attorneys. Eric goes out and he gets the seller motivations, and then she does the follow-through. That's how they got stuff done so quickly.
4. Hold Each Other Accountable
As Eric and Aleeha’s mentor I witnessed this quality in their relationship. As we know, accountability is the glue that ties commitment to the result of building a family fortune. Oftentimes, when Eric was talking to the seller, he would have Aleeha on the phone because sometimes she can pick up on things that he may miss. When Aleeha is doing the financial piece and working with the attorneys and the documentation, Eric will watch and learn so that he is involved as well.
5. Encourage One Another
Eric and Aleeha are constant encouragers of each other, giving each other verbal affirmation. An example of this happened when they were considering the investment of time and capital and all it takes to do the program. Aleeha looked at Eric and said, "It's not that we can't fail. We just won't." That spoke volumes to Eric and he knew then that they were supposed to do it. He just needed that encouragement from his wife.
Investing with Your Spouse: Power in Unity
What a powerful testimony of investing in commercial real estate with your spouse! To go from 0 to 16 units on their first deal is inspiring. Eric and Aleeha are proof that you don't have to have a PhD or a million dollars in the bank to be successful in this business. Aleeha sums up perfectly what makes them successful as a couple:
“Have good communication throughout, know one another's strengths and differences, yield to that and be willing to compromise even if you don't get your own way about something, because the ultimate goal is building this business for our family and for the kingdom of God."