The Risk and Reward of Purpose-Driven Real Estate Investing

The Risk and Reward of Purpose-Driven Real Estate Investing

Erin Thomas is a real estate agent who understands the importance of building relationships and having a strong network to provide value to investors beyond just finding deals. In a recent podcast episode titled "The Risk and Reward of Purpose-Driven Real Estate Investing," she shared her experience of a risky investment that ultimately paid off.

Erin and her husband purchased a large 7000-square-foot property in Pepper Pike, Ohio for $525,000. Despite needing extensive renovations, Erin saw potential in the property and decided to take a risk and buy it herself. She used a hard money lender to finance the purchase, and her out-of-pocket expenses were only $7,000 after factoring in her commission.

Erin's husband quit his job at the post office to become their contractor, and they worked tirelessly on the property to renovate it. The couple refinanced the property in January 2021 for $1.5 million, creating about $380,000 in equity. However, this was a risky investment for them, as they were in a half-million-dollar loan at 15% interest, and their monthly payments were over $6,000. Erin emphasizes that this deal was a make-or-break moment for them financially, and they were relieved and proud to have successfully completed the renovation and refinancing.

Erin's experience highlights the potential rewards and risks of real estate investing, especially when done with a purpose and values that align with your target audience. Syndication is a way for agents and investors to be part of something larger than what they could accomplish on their own. Building relationships is also critical, as an agent's network is their value. Investors will not trust an agent to find them a deal if the agent cannot provide them with other valuable resources, such as good contractors and property management companies.

As an agent, Erin uses the Multiple Listing Service (MLS) to find multifamily and commercial properties that have expired, meaning they were not sold within their original listing period. She approaches expired listings in a conversational tone, building relationships with the sellers by asking them questions about the property and what is or is not working for them. Erin does not view the process as a long game of working the sellers down in price but rather as a transparent process in which she tells the seller the true value of their property based on market data and analysis.

Erin emphasizes the importance of finding motivated sellers, meaning those who are willing to negotiate on price and other terms to close a deal. She learned this lesson the hard way when she spent eight months trying to sell overpriced properties for a seller, only to make no money and eventually have to fire the seller. She also shares that she built her business off of Facebook, where she has been very consistent in posting listings, closings, and answering questions in groups. Building trust with people in the groups has been the most valuable aspect of her social media strategy.

As a real estate agent who works with both homeowners and investors, Erin has found that scheduling is a major factor that influences her work-life balance. She chooses to work primarily with investors because they prefer to work during regular business hours, while homeowners typically want to view houses in the evenings or on weekends. Erin prefers to have most of her nights and weekends free to spend with her family, so she has structured her day accordingly.
In conclusion, Erin's story highlights the importance of taking calculated risks and building relationships in real estate investing. It also emphasizes the importance of finding purpose and values that align with your target audience, creating a strong brand that resonates with them, and implementing a consistent social media strategy to build trust with potential clients. With these elements in place, you can build a purpose-driven business that aligns with your values and makes a positive impact.

Don't forget to reach out to Erin Thomas:
Instagram: https://www.instagram.com/erinthomassells/
Linkedin: https://www.linkedin.com/in/erin-thomas-968112187/
Facebook: https://www.facebook.com/Erinthomassoldit/

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