RG 093 – Top Techniques to find Cracking Deals in HOT U.S. Markets with Sterling White & Jacob Blackett
About Sterling and Jacob
- They founded Holdfolio in 2014
- Jacob started investing in real estate at university
- Sterling’s first property was a no-money down investment
Nuts and Bolts
Sterling White and Jacob Blackett are the founders of holdfolio.com. Sterling entered the world of real estate in 2009 by doing construction on commercial projects and then got into single family projects at age 23. Jason started in real estate when he was at college, he bought and sold 2 fix and flips in southern Calinfornia in 2010. In their partnership so far they have worked on 100 single family homes nationwide and placed over $40million in single family rentals. Jacob made his first dollar when he was young working with his father who was a car mechanic. Sterling make his first dollar elementary school where he started a small business selling cool-aid.
Sterling and Jacob both had a mindset shift to get into real estate, Jacob studied finance at college and weighed the options between a life in finance or real estate and he chose RE because of the income stream. Sterling stumbled across RE when a landlord friend took him under his wing. When Jacob was at college he went to a free class on RE investment and borrowed money from his grandmother and a hardmoney lender. He bought the two properties at $150,000 and $175,000 and meant to sell them on at a $100,000 profit each, however he ran into problems with the contractors and so the work took longer than expected. This meant that he actually lost $70,000 on the deals but after 12 months at college he remade the money and paid back his grandmother. Sterling’s first deal was a no-money down deal where he didn’t have to put any money into the deal but instead put time and money into marketing and deal acquisition. He did the underwriting and the management and his mentor brought the money.
Jacob and Sterling founded Holdfolio in 2014 and it took about a year of start-up and selling shares etc to get onto their feet. They began with single family homes and then moved into multifamily. They organise each investment by keeping 30% of ownership of the property and giving 70% to investors and they keep their costs at maximum $35,000 per door and deal in cash only, no loans. This means that there’s no leverage because all money is up front, they are looking into making IRR more appealing to investors by taking out some leverage, but will probably do this when they’re more experienced. They built up the management side of the business themselves when they were working on single family homes. They realised that it would be easy to scale up to multifamily and it’s a lot less time intensive to purchase 1 property with 100 units rather than 100 single family homes.
When looking for properties they search off-market and try to go direct to the owner. In their most recent multi family property they built a relationship with the owner and even bought him a thank you card once the deal had gone through. They aim for class C properties and their tip for finding deals in a hot market is just grit – you need to keep searching and trying. The biggest lesson they have for doing well in real estate is that no one will care about your asset as much as you, so keep everything in house.
Top tips – Sterling
- Most important habit – Writing down goals
- Most influential person – Earl Nightingale
- Most important tool – Propertyware
- Most important failure – Not getting started sooner
Top tips – Jacob
- Most important habit – Keeping a notebook in his pocket for affirmations and goals
- Most influential person – Their whole team
- Most important tool – Propertyware
- Most important failure – The money he lost on his first 2 deals
- Contact – holdfolio.com