I had a call with a potential investor to join myself and a contractor in acquiring an investment property. The plan was that I would bring the cash (short term), she would acquire the mortgage and the contractor would do all the renovations free of charge. The contractor had brought the deal as well as the potential investor, but felt I had more experience in explaining the co-venture responsibilities, so he asked me to head up the call.
I had one job to do and I have to admit I failed miserably. Let me explain why.
Whenever I am meeting a new investor for the first time, I like to get to know them a bit, find out what makes them tick. I try to understand where their priorities lay, what their expectations are and maybe a little about how they make decisions. This particular investor was fascinating to me. Although we were on a Zoom call, her video wasn’t on, but I could tell from her voice that she sounded reasonably young. Turns out she is only twenty-seven. This woman, with her twenty-five-year-old sister built a Personal Support Worker temporary employee service business. In three years they had opened four offices and were growing at a significant pace.
I was impressed, inspired and delighted to see such young and determined women doing sooo well. I understand what it takes to go it on your own, I know the fears and the fact that so few people actually do it. It took me years to develop their level of determination, persistence and confidence. They had my admiration.
She told me that she had put money aside to buy a commercial property intending to move the business from a rental unit to a property of their own. She had done a good amount of homework to determine how she would make it work. However, the deal seemed to have fallen through and she felt if they went through with it, it could put she and her sister in a very tight situation financially, which would make growing the actual business a strain.
Being a real estate investor, and interested in all investment properties, I started asking more about the property they were looking at. I was appreciating the common ground I’d found to relate to this impressive and unique investor.
The more she told me, the more I could see I could help improve their situation. The problem was that to do so, I’d be losing the opportunity that I got on the call for. I didn’t even hesitate– her opportunity was too exciting for me and well, I couldn’t hold back. I literally had verbal diarrhea contemplating the potential of this property. In fact, by the time I was done, I had convinced myself that if she didn’t buy the property, maybe I should. I was able to look at her property through a different set of eyes. I could see things like how to cover the required renovations. A simple private loan, if necessary, would solve her problem. Looking at it from a monthly cost as opposed to an entire renovation cost would make this seems more achievable. How after a year, by increasing rents she would likely be able to refinance all the money back and then some.
We talked about simple ways to increase the value of the property. Things like making the one-bedroom units upstairs into two-bedroom units as the square footage allowed for it in the area. Being a commercial building every time you increase the property income you significantly increase the value of the property. I saw there was potential to raise the residential rates by $870 a month. I was in my glory thinking of the potential.
At some point, she had turned on her camera and was just sort of nodding to me with everything I said. In my head, I was thinking her nodding meant one of two things–either the wheels were really turning on how to go back at this property or she was being kind and couldn’t figure out how to shut me up.
Whatever she thought, I killed my own deal. And I also got off the call feeling that it was the right thing to do. This woman had persistence and drive, and she just needed a little know how.
I like to believe that in that call I made a significant impact in another’s life without the expectation of anything back.