97: Small Multi-Families & Project Management with Gerrit Van Maanen
If you were 19 years old in college, recently just discovered real estate investing, and wanted to get started, how would you propose to do it? Affordably.
Gerrit Van Maanen embarked on his journey to financial freedom almost accidentally. It took place early in college when he and his buddy had to do a reading assignment. Borderline jokingly, the two of them chose Rich Dad Poor Dad as their selection and like most others in this line of business, the rest is history.
As an adolescent, Gerrit was already very entrepreneurial. Growing up in Iowa, he and his brother started and ran a sweet corn business. It would be this same exact brother who Gerrit would partner up with to buy their first duplex together.
Remember how we mentioned Gerrit was in college during this time? Affordable meant that this duplex cost only a tad over $50,000! But that also meant they DIYed the property for over a year! But like any good zero-to-hero story, this was sure to be filled with lessons learned.
From there, Gerrit continued to grow his portfolio through steady rentals, and is looking to experiment with different strategies to spice up his investing a bit. Up to date, Gerrit is the acting project manager for Spartan Investing Group, who specialize in value-add commercial properties all across the United States.
Our takeaways from our conversation with Gerrit:
1) Have reserves available. This was the biggest lesson Gerrit learned from his very first investment purchase. Just because you run your calculations and the pro forma looks good, it doesn’t mean that reality will go as smoothly as the plan. Furthermore, just because you can afford the down payment, it doesn’t necessarily mean you can afford the investment! Costs will add up and budgets will be disrupted. Have reserves available!
2) Simplicity. When working on his first house flip, Gerrit was unsure of his renovation plans. He had many ideas, but that only made making decisions even harder. Having options is a good problem to have (that’s what makes real estate investing so attractive to many people). But at the end of the day, a good problem is still a problem. All too often, in our effort to be great, we lose our footing. Investing is done with the intention to stand the test of time. That is accomplished through simplicity.
3) Versatility. Investors with access to more capital may disagree, but Gerrit prefers small multi-family investments (1-4 units) due to the fact that you can do a lot with these types of properties, in terms of strategies. Generally speaking, what makes larger multi-families more attractive to investors are the paper profits. However, paper profits don't necessarily mean more profit in reality. With small multi-families, Gerrit says, you tend to have longer term tenants. And having low maintenance tenants combined with low turnover units can more than make up for the profits you would otherwise not receive.
4) High quality talent is difficult to find, provide value to the people who need it. When Gerrit discovered Spartan Investing Group (SIG), he instinctively provided value to the company by doing research on his market and presenting it as a potential investment opportunity. Although SIG has yet to take Gerrit up on his offer, that was enough for them to notice Gerrit’s qualities as an important person to have on their team. So when looking for a mentor, employer, or partner, be someone who has high quality talent. The other party is more likely to take notice, and the benefits will be reciprocal (win-win!).
If Gerrit could go back and talk to his 16 year old self, he’d tell him, “Focus on school. Learn more by doing more.”
An unexpected benefit of real estate investing, Gerrit said, was the ability to have so many doors open to mentorship.
A piece of advice Gerrit would tell his friends looking to get started in real estate would be to “Have $10,000 more than your down payment.”
Gerrit recommends using Smartsheet to help you run your real estate business smoothly and efficiently.
Gerrit recommends reading Creating and Growing Real Estate Wealth: The 4 Stages to a Lifetime of Success by William J. Poorvu to help you envision real estate investing holistically.
If you’d like to get in touch with Gerrit, visit: spartan-investors.com
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