Q&A with Laura Williams, Real Estate Investor
I had the opportunity to sit down with fellow Kansas City area real estate investor, Laura Williams, to learn more about her investing journey, what she has learned along the way, and her goals for the future. Laura is a buy-and-hold investor who loves to find overlooked properties in desirable neighborhoods. She not only owns property in Kansas City, but also in New York and Cape Town, South Africa. Laura's instincts, grit, style, and all-around kick-ass nature are to be marveled!
Q: How did you get into real estate investing? What did your first purchase look like and do you still own it?
Laura: My first real estate purchase was an apartment to live in. I was residing in New York City and rents were becoming more and more expensive. After looking at the numbers more closely, I finally got over my fear of buying. After owning that first property for only a relatively short time, the value nearly doubled. I decided to sell that first apartment and use the proceeds to buy two more: one for my mom and another for myself. Now that I had experience from those purchases, I continued to look for more properties, but soon found there were fewer & fewer opportunities to buy good deals in New York City. While working in Cape Town, South Africa, I spent my free time going to open houses. I ended up buying 4 units in Cape Town in a hotel where all maintenance is handled by the onsite management. I would have purchased more, but was cautious, given the country's distance from the U.S.
Q: What mental blocks or challenges did you need to get past to invest in real estate?
Laura: I always thought that I had to do everything myself--that I had to fix every problem, tighten every screw. I was afraid of running myself ragged trying to do it all myself. Once I learned the necessity of establishing a network of people to help me do most of the work like a property manager, painter, handyman, I felt more confident that I could be successful investing on my own.
Q: What are your non-negotiables when investing? It is location? Type of property? Something else?
Laura: When searching for a place to invest in outside of New York, I was looking for a city that had population growth, diversity of employment, and offered desirable neighborhoods for a reasonable price. I often look for gay neighborhoods because these are ones that are usually walkable to coffee shops and good restaurants. Usually the gays are the first group of people moving in a neighborhood before it becomes gentrified and prices appreciate. I invest in the core of the city where space to expand is limited so they can't keep building outward out. The more land that is available for expansion, the more competition there is to supply housing.
Q: What mistakes have you learned from the most?
Laura: The times when I feel I made a mistake are when I didn't follow my intuition. I let others talk me out of a property or an area when I knew I should invest in it. Other times, particular quirks of a property bugged me, but I bought it anyway. One lesson I have learned is that if something bugs me about a potential rental property, it will bug the tenants, too. I have learned to listen to my gut regarding both the good and bad. I don't let myself be talked out of a deal by someone else now. I do look at the financial aspects involved, but I don't let logic override my intuition.
Q: What advice would you give to someone newer to investing?
Laura: One piece of advice is to never rent to a friend. As the owner/landlord, you need to be able to maintain control of the business aspects of the relationship. Friends may try to get away with stuff or expect special favors and make it harder to say "no" to them without threatening the friendship. When you are dealing with a stranger, it is easier to say "no" and keep them in line. I would also advise firing subcontractors/property managers/etc quickly when they mess up a job. I have been too easy on them at times and later much regretted not firing them sooner.
Q: What has surprised you the most in real estate investing?
Laura: It surprises me that I can explain all the benefits of owning real estate, of having rental income (and the case is compelling), but people still don't do it --they don't take any action at all. Either they are too afraid to take the first step, or they are women who look to their man to make all the money. To me, as a woman, owning real estate is empowering because it gives me the security of owning a real asset that I can leverage if I need to plus have my financial independence from a man and a 9-5 job.
Q: What are your goals from here?
Laura: I would like to stabilize the properties I own. I have one property I teasingly call the "cat house" that has been a huge gut job & is still not completed. I also have a large home that is needing a refresh now that long-term tenants have moved out. I also want to keep working on my systems for keeping everything running smoothly. In addition, I will continue to buy when the opportunities for good deals arise. Looking back, I haven't been as aggressive as I should have been when I've encountered small windows of time when great buying opportunities existed. I'm always on the lookout for new windows to open up in the market.
Q: What last thoughts would you like to share about real estate investing?
Laura: I want people to understand that you get out what you put in. The more time and energy you put into your real estate projects, the more you will get out of them. If you cut corners, people will notice. Become more knowledgeable about the areas of real estate where you are less confident . These could include such things as learning more about how to perform simple maintenance work correctly, or maybe just spending more time researching neighborhoods. Build your network of people in the business. Make as many investing friends as you can. You will be able to help each other out when bumps happen (and believe me, there will be bumps!). You will be learning lessons the hard way--you will make mistakes, but having others you can call on helps you to get over the bumps and keep moving forward.