Ep 130: Deal Review: Hear Chris and John’s Top Lessons From Their Deals
Even the most attractive deals can lead to disaster. Investing success is about having the resilience to adapt to shifting circumstances. Today co-hosts Chris Grenzig and John Cohen break down two of their deals, sharing their top learnings along with how they adapted to overcome their challenges. For our first deal review, we dive into the most expensive per door deal that John has ever made. John unpacks how painful it became to manage this property and how they dealt with plummeting tenancy rates, a sky-rocketing interest rate, and even a murder on the property. By hearing John’s solutions, listeners will have a better sense of the issues that are often overlooked in the due diligence process. After touching on more of John’s main takeaways, we take a deep look into Chris’s deal; one that he had only three weeks to close. As Chris highlights in his story, understanding your market is critical to seeing investing opportunities. When analyzing Chris’s deal, we then discuss the need to balance risks and rewards and why you need to develop a clear idea of how your deal will perform under worst-case scenarios. As their examples show, no deals run smoothly. Tune in for their insights into getting ahead of trouble instead of stumbling into it.
Key Points From This Episode:
Co-hosts Chris and John share details about their life and investing goals.
Creating accountability as a way to achieve your goals.
John presents an outline for the deal we review in this episode.
Hear about the factors that ham-strung John’s deal as they made it.
Issues that John faced that didn’t appear when they were performing due diligence.
John discusses the solutions that he tried to fix a problem property.
Why, after fixing his tenancy issues, John went to market with his property.
John opens up about the main lessons he learned from his problem property.
Why you can’t trust how a property looks when it’s put on the market.
John’s key lesson; it takes longer to lease units than you think.
Exploring the deal that Chris recently closed on.
Why Chris prioritizes knowing the people and the story behind every new deal.
The benefits to understanding your market.
Why you need to know how your property will perform under worst-case scenarios.
Understanding how to balance the risks and rewards of each deal.
“If you can’t find a mastermind group, then create one. And then bring the people in that you want to be in who can push you forward.” — @johnc429 [0:10:40]
“We went from a property that, on paper, never went below 90% occupancy to one that went into 60% occupancy.” — @johnc429 [0:22:40]
“It takes a long time to take a property from 80 to 100% occupied. When you’re looking at new deals and you’re factoring in major renovations, you can’t do those deals at 97% occupancy. Things will go wrong and tenants will leave.” — @johnc429 [0:29:20]
“Sometimes the feeling of a property takes time to change. Even if you’re below the property next-door, you may need time to change the tenant profile and property feel to match it.” — @ChrisGrenzig [0:43:30]
“Understanding the downside is as important as looking at the rose-colored-glasses upside.” — @johnc429 [0:58:18]
“When you’re looking at a deal and you buy it for 90 a door and you think it’s worth 120, there’s still a lot that can go wrong with it.” — @ChrisGrenzig [01:01:01]
“The more things that have to go right in a deal, the riskier it gets.” — @ChrisGrenzig [01:04:37]
Links Mentioned in Today’s Episode:
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Connect with Chris - https://linktr.ee/chrisgrenzig
Toro Real Estate Partners - http://tororep.com/
The Real Estate Investing Experience - https://www.thereiexp.com/
The REI Experience YouTube - https://www.youtube.com/channel/UCjt6pmkA8ogACZ26oqhBM0g
The Real Estate Investing Experience Podcast - https://podcasts.apple.com/us/podcast/the-real-estate-investing-experience/id1481520260