Today I have Eric Bowlin, a real estate investor and blogger who lives in Plano, Texas. I first met Eric at the FinCon 2016 last September in San Diego where I got to hang out with him and share a lot of laughs. Eric’s a down to earth guy and at a young age has achieved financial freedom through rental real estate. Eric also writes about real estate on his blog over at Ideal REI so be sure to check it out.
So without further adieu, let’s get on with the interview!
Where do you live?
Where do you invest?
If real estate investing is not your full-time gig, then what do you do for a living?
I worked full time in real estate until last year when I became financially independent.
How did you get started in real estate?
I accidentally got into it actually. I was working on my PhD in Economics and wanted to buy a home because of the $8,000 tax credit back in 2009. Around my school there is nothing but multi-family properties. So, I bought one. Long story short, I had an epiphany one day and it wasn’t long until I had left my program and got into real estate full time.
What is your real estate investing strategy?
I’ve tried it all – I’ve done flips, rentals, SFR, multifamilies, and I even own a small trailer park. After trying just about everything, I have found my niche to be value-add buy and hold multifamily properties. I find properties that need some work so I can build equity from day one. Often I pay cash and refinance after the work is complete, but sometimes I don’t if I want to keep my leverage low. Flips are great for some quick cash, but I like buy and hold because it will provide a lifetime of stable rental income. I value the freedom it provides.
Investing Out of State
Why did you make the jump to invest outside of your local market? Why not invest locally where you live?
I didn’t mean to become an out of state investor, but in 2015 I moved from MA to TX. Suddenly I had to manage everything from a distance.
It wasn’t an easy transition, but it was the best thing I ever did. By hiring other people to do the work, I have a ton of free time to find better deals or find other ways to earn money. If we didn’t move, I may have been stuck as a Landlord for a long time.
How do you invest out of state?
Right now I have a small team of people that work for me. My handy-man is very loyal to me and also acts as a bird-dog of sorts.
I’ve bought 4 properties from afar now and the system is working ok. Either I find the deals online or he finds them and tells me. I’ll pay him to go tour the building and get the info from the seller that I need.
If the property is good, I’ll put together an offer.
I generally fly up to look at them – I have gone to 3 of the buildings before purchase, but 1 of them I never stepped foot in.
What are the biggest challenges you’ve experienced investing out of state?
The hardest part is management. It took us a year to develop our system, and we are still improving it every day. We had a lot of mistakes up front but things are finally starting to calm down.
I use a hybrid management approach where I am actively involved but also hands-off at the same time.We make the final decision on all tenant applications and make decisions on most big ticket items. We have a solid team of professionals we can hire for various work, and we just have my ‘property manager’ there to make sure people actually get stuff done.
By doing this we literally save tens of thousands a year in property management fees, but it still requires only 4 or 5 hours a week worth of our time.
Today and Beyond
What does your real estate portfolio consist of today?
I own 17 residential units and 5 trailer spaces (22 units total). I’m closing on a 5 unit mixed use building in about 2 weeks which will bring me up to 27 units.
How much time do you spend on your real estate business?
About 5 hours a week now.
What’s the end goal? What are you trying to achieve with your real estate investments?
Right now I’m trying to grow my portfolio to around 50-60 units so I can hire a manager full time. I’ll be able to retain full control but keep my costs down.
After that, I’ll focus on buying larger buildings that are easier to manage.
What advice would you give to someone looking to get started in real estate?
The best thing you can do is to network and find a mentor. Your friends and family may tell you it’s risky or even impossible to do, but that’s not true.
Get into an investor club, go to networking events, and get to know like-minded people. It won’t be long until you’re buying property!
Something About You
What are your favorite articles on your site?
I have two articles I really like. The first one is “Renting vs Buying a House”.
One thing I always say is that a home is not an investment. If you want a home, then buy one, but don’t buy it because you think it’s a good investment. This article challenges the conventional wisdom that buying a home is a great investment.
I also like the article “how to be financially independent”.
I link to a really cool video that I found, and go over what it takes to become financially independent. In essense, I realized that financial independence is about a mindset. Most people think the mindset is crazy and those people would rather work longer and harder to achieve their goals. The person with the financial independence mindset will work harder at first in order to set up something that will provide income for a long time afterwards.
What’s the best thing you’ve read lately?
Pitch Anything – A book about categorizing people and adjusting your sales strategy to overcome their objections.
Where can people go to connect with you?
Thanks for stopping by Eric! If you want to learn more about Eric, reach out to him on his website.