I have read the Millionaire Fastlane book, and loved it ! In fact, I have now read it 3 times.
I am seeking some advice from the "real" fasteners on this forum, who are truly executing and earning.
I'm specifically interested in hearing opinions or suggestions for how to "Fastlane" my company, and if it is even possible, from any of you who might have commercial real estate background, or success in doing so.
This is not only my first Fastlane Forum post, but my first post in a Forum of any kind.
Therefore, let me qualify myself to the audience:
I'm a commercial real estate professional with over a decade of experience.
Prior Job: Broker (for Nat'l firm, commission only) = 7 years, over $700MM in transactions personally orchestrated by me, average net annual earnings approx $250k-$300k/year during this time period.
Prior Job: Sales Manager of Major National Brokerage Office w/ ~40 direct reports (agents) (salary + bonus) = 2 years
Current Position: Founder/Owner of Commercial Real Estate Syndication Business = 2 years
Since leaving the slowlane and starting my own investment company in Feb 2011, here is what I've executed on:
Raised a total of $4,000,000 in cash from high net worth individuals
Purchased 5 houses and 6 commercial properties.
Renovated and Sold houses in 11 months - $60k profit to me, 15% yield to investors
Own 6 commercial properties (5-7yr hold strategy) - 1 retail, 1 medical office, and 4 senior housing facilities (2 nursing homes, 2 assisted living facilities).
Personally Earned about $300k from syndication fees in 2012. Allocated about $140k into the properties for a fractional ownership share, which give me monthly passive income:
Earn about $21,000/yr in passive income from my own personal participation in these investments.
Earn about $100,000/yr in passive income from property management fees.
I have hired 2 full time staff for my investment co:
1) Executive Assistant
2) Acquisition Manager (tasked with finding properties to buy: filtering, analyzing, and presenting to me)
I have formed a property management company, to manage only properties which we own and hold in our portfolio. I now have approx ~60 individuals on payroll under that company.
I am also a commercial real estate developer, and recently kicked-off a $15M development project (new assisted living facility)
Initially, raising the money for our investments was the biggest challenge (new company, no track record on the sponsor side, etc). 24 months later I have 50+ clients who are very happy with the returns they are receiving from the investments i've sponsored (currently, the portfolio is averaging ~11.7% annual yield, paid monthly to investors. NOW, my biggest challenge is finding enough great investment properties to keep up with the investor appetite !
I've found myself in a job, working IN the business far more than ON the business. This is a complete NO-NO according to the Fastlane mentality which I believe in, and am hoping to apply to my company. I have authored a training manual which spells out the "system" in a highly detailed format, so that I may hire additional acquisition managers to find more properties to purchase, and to take the purchase through to closing.
Is there a way to leverage my background and experience through others which I am missing, which would enable me to put the gas pedal to the floor? Or is real estate truly the "Wealth 1.0" as described by MJ DeMarco in his book, and I should be seeking more fertile lands? The way I see it, is I need to have a team of people finding properties to buy, coordinating the due diligence process through to closing, and managing the assets, so I can spend my time raising large amounts of capital from the private equity firms who are now noticing me (and calling on me!) so that I can deploy more equity and have more assets under management? Each time I buy a new property, I typically earn around $100k net syndication fee plus I add about $30k - $40k/yr in recurring management fees. This creates a great snowball effect for recurring passive income, however there is a problem: In order to hit $200k/month I would need to purchase another 42 properties which would take me about 10-15 years at the current rate.
It appears my model has scale limitations in a couple of critical areas:
1) my ability to purchase properties is directly tied to time of an individual human calling property owners/brokers to uncover acquisition opportunities, and then analyzing those to see if they meet our criteria.
2) there are a limited number of commercial properties out there, including limitations on geographical proximity to our headquarters (meaningful regarding property management) as well as product type focus (a finite # of senior housing properties in existence).
Based on my own interpretation of MJ's book, here are my assessments of problem = solutions:
1) Limited time / human resources for finding new properties to buy = some TBD method of marketing which would bring leads to me (i.e. property owners who want to sell), and not be tied directly to my team's time (cold calling & meetings).
2) Can only process a finite # of acquisitions/yr = Work on much larger projects (i.e. $20M+ deals vs. $4M deals)
If any of you fastlane entrepreneurs have had success in TRULY & SUCCESSFULLY fastlaning a real estate investment company, or if you've been down this road already in a similar fundamental business, I would welcome any guidance, suggestions, or constructive critiques you could offer! Thanks in advance!
~E
I am seeking some advice from the "real" fasteners on this forum, who are truly executing and earning.
I'm specifically interested in hearing opinions or suggestions for how to "Fastlane" my company, and if it is even possible, from any of you who might have commercial real estate background, or success in doing so.
This is not only my first Fastlane Forum post, but my first post in a Forum of any kind.
Therefore, let me qualify myself to the audience:
I'm a commercial real estate professional with over a decade of experience.
Prior Job: Broker (for Nat'l firm, commission only) = 7 years, over $700MM in transactions personally orchestrated by me, average net annual earnings approx $250k-$300k/year during this time period.
Prior Job: Sales Manager of Major National Brokerage Office w/ ~40 direct reports (agents) (salary + bonus) = 2 years
Current Position: Founder/Owner of Commercial Real Estate Syndication Business = 2 years
Since leaving the slowlane and starting my own investment company in Feb 2011, here is what I've executed on:
Raised a total of $4,000,000 in cash from high net worth individuals
Purchased 5 houses and 6 commercial properties.
Renovated and Sold houses in 11 months - $60k profit to me, 15% yield to investors
Own 6 commercial properties (5-7yr hold strategy) - 1 retail, 1 medical office, and 4 senior housing facilities (2 nursing homes, 2 assisted living facilities).
Personally Earned about $300k from syndication fees in 2012. Allocated about $140k into the properties for a fractional ownership share, which give me monthly passive income:
Earn about $21,000/yr in passive income from my own personal participation in these investments.
Earn about $100,000/yr in passive income from property management fees.
I have hired 2 full time staff for my investment co:
1) Executive Assistant
2) Acquisition Manager (tasked with finding properties to buy: filtering, analyzing, and presenting to me)
I have formed a property management company, to manage only properties which we own and hold in our portfolio. I now have approx ~60 individuals on payroll under that company.
I am also a commercial real estate developer, and recently kicked-off a $15M development project (new assisted living facility)
Initially, raising the money for our investments was the biggest challenge (new company, no track record on the sponsor side, etc). 24 months later I have 50+ clients who are very happy with the returns they are receiving from the investments i've sponsored (currently, the portfolio is averaging ~11.7% annual yield, paid monthly to investors. NOW, my biggest challenge is finding enough great investment properties to keep up with the investor appetite !
I've found myself in a job, working IN the business far more than ON the business. This is a complete NO-NO according to the Fastlane mentality which I believe in, and am hoping to apply to my company. I have authored a training manual which spells out the "system" in a highly detailed format, so that I may hire additional acquisition managers to find more properties to purchase, and to take the purchase through to closing.
Is there a way to leverage my background and experience through others which I am missing, which would enable me to put the gas pedal to the floor? Or is real estate truly the "Wealth 1.0" as described by MJ DeMarco in his book, and I should be seeking more fertile lands? The way I see it, is I need to have a team of people finding properties to buy, coordinating the due diligence process through to closing, and managing the assets, so I can spend my time raising large amounts of capital from the private equity firms who are now noticing me (and calling on me!) so that I can deploy more equity and have more assets under management? Each time I buy a new property, I typically earn around $100k net syndication fee plus I add about $30k - $40k/yr in recurring management fees. This creates a great snowball effect for recurring passive income, however there is a problem: In order to hit $200k/month I would need to purchase another 42 properties which would take me about 10-15 years at the current rate.
It appears my model has scale limitations in a couple of critical areas:
1) my ability to purchase properties is directly tied to time of an individual human calling property owners/brokers to uncover acquisition opportunities, and then analyzing those to see if they meet our criteria.
2) there are a limited number of commercial properties out there, including limitations on geographical proximity to our headquarters (meaningful regarding property management) as well as product type focus (a finite # of senior housing properties in existence).
Based on my own interpretation of MJ's book, here are my assessments of problem = solutions:
1) Limited time / human resources for finding new properties to buy = some TBD method of marketing which would bring leads to me (i.e. property owners who want to sell), and not be tied directly to my team's time (cold calling & meetings).
2) Can only process a finite # of acquisitions/yr = Work on much larger projects (i.e. $20M+ deals vs. $4M deals)
If any of you fastlane entrepreneurs have had success in TRULY & SUCCESSFULLY fastlaning a real estate investment company, or if you've been down this road already in a similar fundamental business, I would welcome any guidance, suggestions, or constructive critiques you could offer! Thanks in advance!
~E
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