How to Manage Out of State Properties with Sep Bekam, Episode 65
Sep Bekam had a plan to be set for life. Study for 20 years, get a job and earn money. But after learning the sad truth that money devalues over time through inflation, he knew he had to change course. He added an investment property on the side while working as an electrical engineer. Like any novice, he learned valuable lessons from his leap. Instead of welcoming checks on his first properties, he got eviction after eviction. He learned valuable lessons that have helped him manage out of market investments.
Sep had already left corporate America at the age of 31 and has been set for a more thrilling life in real estate. On this episode, he shares helpful insights on vetting property management companies and contractors, choosing the right market, and improving challenged neighborhoods.
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Key Market Insights:
An electrical engineer without an entrepreneurial backbone
Worked full-time during the day, and studied for his master’s at night
To improve his way of life, he needed another stream of income
Learned that money is devalued over time after reading Rich Dad’s Conspiracy of the Rich by Robert Kiyosaki, which talked about how recession happens
Started investing in 2010 on the side, and eventually left his corporate job at the age of 31
Invested in two turnkey properties which were fourplexes in Phoenix
Turnkey properties actually led to eviction after eviction, and getting fired by property management companies
Major Pitfall: Reliance on pro forma without own due diligence and underwriting
Properties stabilized after the third property management company and successfully sold those in 2017
Phoenix Market: Low home prices, number of baby boomers, affordable economy, landlord and business friendly
Tip: Property Management Company should match your perspectives
Founder and CEO of Bekam Investment Group
Holds over 150 single family homes, 6 multifamily properties and an office building in six states
Treats single family homes as a scattered apartment complex. Maintenance addresses multiple issues within one area only
Tips on Choosing the Right Market - piggyback on other developments, and find enough properties on a street or in a neighborhood to drive scale
Data Points on Finding the Right Market: population of 200,000 people or more, 2% job growth, 3% population growth
California has difficult eviction laws. Much easier in Texas, Virginia and Arizona
Currently working on a bank’s portfolio with 277 houses
When Finding investors - know their goals and make sure they align with yours
Bull’s Eye Tips:
Winning Your Market: Schedule numbers of meetings with brokers, contractors, and property management companies.
Tracking Market Changes: Checks Google Trends regularly.
Daily Habit: Meditate. Make a vision board. Journal.
Rich Dad's Conspiracy of the Rich by Robery Kiyosaki
The Road to Ruin by James Rickards
“We don’t want to make mistakes. But if we can make a mistake, learn from that pitiful place.”
“There is only problem owners.”
Places to Grab a bite:
Connect with Sep: