Dennis Fassett entered the investment real estate business in 2005 in southeast Michigan.
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Tell me about your current businesses.
The Great Lakes Investment Fund is focused on real estate investment. I have a portfolio of single family rental houses and apartment buildings, and I'm in the process of buying more of these assets, both by myself and with partners.
The fastest growing part of that business is buying apartment properties with partners. With all of the uncertainty in the stock market, people have sought out different, and safer, investment vehicles for their brokerage accounts and their retirement accounts. Apartment buildings seem to fit the bill because they generate great returns and they're physical assets unlike stocks and bonds.
The Cash Flow Mercenary part of my business is focused on training and information products for real estate investors, primarily those like me that are/were corporate executives that may not know much about real estate and definitely don't have a lot of time to spend on it. In that business I offer in person seminars, home study courses, coaching, and consulting.
How did you come up with your business idea?
I was a very happy corporate executive in the early 2000s. Things were great and I was on track to be a corporate VP in two years. Then the bottom fell out of the automotive industry. At that time I had a stay at home wife, four kids under nine years old, and we had just taken in my terminally ill mother to live with us. So I had a lot of people depending on me.
Since no one knew where the automotive industry was going, I decided that I needed to do something to create a safety net for my family. I looked at starting a business, buying a franchise, getting a second job, and even multi-level marketing. But after searching for something that was a fit, the only thing that I could find that would give me the safety net that I needed plus that was do-able in the little time that I had available was rental real estate.
What were you doing in the auto industry?
I was a Director in Information Technology at an automotive supplier here in southeast Michigan.
Did you operate your business from your home? What were the challenges and benefits to this strategy?
I have operated this business exclusively from my home from the beginning. The primary benefit has been lower overhead expenses. But it's also a lot more convenient, which was important when running a business along side a day job. The challenges with having a business at home were mostly related to focus and time. When I'm working there it's hard to tell the kids "no" when they want to tell me about their day or some other critically important thing that happened. I wouldn't change it though, because it has the added benefit of showing the kids what running a business is like, and it has started to give them the business mindset vs. a job mindset.
With the current economy in a slump, what cost saving tips would you have for a new entrepreneur?
I started doing "zero based" spending, and I recommend that new folks do the same. What that means is that no spending is automatic. In each case I evaluate the expense, and for bigger expense items I spend more time looking for alternatives. Does it take more time? Absolutely. But it has made a big difference since I found some waste, even though I'm a smaller business.
Have you outsourced any portion of your business? Has that worked for your business?
Yes – I outsource as much as I can that makes sense from both a financial and time perspective. I was doing apartment refreshes between tenants myself, but now I outsource. I was painting my rental houses between tenants, but now I outsource. On the flip side, I had outsourced the showing of apartment units to one of the tenants, and that didn't work very well even though it was a huge time saver for me, so now I'm back doing that myself.
Social marketing is consistently being written about in the small business space. Has it worked generating business for you?
Social media has been huge for my business. For my Great Lakes Investment Fund, it has been hugely valuable in making contacts in the industry – apartment brokers, loan officers, appraisers, other owners etc. It has been a spectacular source for targeted networking. I have also found deal partners and deals via referrals using social media tools such as Facebook and twitter.
For my seminar and training business using Facebook and twitter has gotten me paying clients!
What advice would you give to somebody else who wanted to start a similar business?
Two things. The first is do it. There has never been a better time to be buying and holding real estate. The second is find someone, preferably someone in your local market, that has already done it and take them to lunch and ask questions. The most important thing though is to act.
Thank you for your time and inspiration, Dennis. Good luck with real estate businesses! Readers, you can find Dennis on twitter at www.twitter.com/dennisfassett , and on Facebook at www.CashFlowMercenary.com.