RPOA Member Spotlight: Jeremy Cole
It’s a bright and sunny day. The birds are chirping, the air is fresh, and you can feel the magic of success all around you. Today is the day! You’re going to close on a new real estate investment deal and you can feel the excitement and energy building. You’re finally standing in front of the property, and you take a deep breath of satisfaction as you look at the house in front of you–the house that will soon be all yours.
It’s a disaster. The paint on the exterior is peeling so badly that you can’t tell what color it once was. The roof is caving in. The windows are just broken out panes that have resulted in weather damage on the interior of the house. And you can’t really pinpoint it, but there is a smell coming from inside that you are pretty sure is most likely a dead animal or two. As you breathe it all in, you feel yourself come alive with excitement and anticipation…or maybe not.
To most of us, this scenario sounds like a nightmarish headache that no amount of Advil will cure. But if you are Jeremy Cole–affiliate RPOA member in this quarter’s member spotlight– this scenario is a dream come true! Jeremy loves buying the houses that no one else wants. So much so that he just landed a pilot episode on the DIY Network, “From Gritty to Pretty”, all about buying these types properties and turning them into brand new homes, ready for families to live in once again.
Jeremy got started in real estate investment in 2006 when he was just 18 years old. His father and uncle purchased his aunt’s house. Jeremy moved into the home and was able to do some minor repairs and improve its value. This process got his feet wet and gave him a taste of what it might be like to fix up and flip houses for a profit. He began searching for a second property soon after. In his search, he met a real estate investor and licensed real estate professional that would become one of his most influential mentors. She helped him through his first three years of real estate investment and even helped fund his first solo home purchase. She lent him $36,000 of the $40,000 he needed to make the purchase. Jeremy sold his car to be able to fund the remaining $4,000. And just like that, Jeremy landed his first solo deal.
Shortly after purchasing his first property, Jeremy joined a Real Estate Investors Association. He recommends anyone getting started in the real estate business join a REIA before purchasing their first property. “I joined because of the inexpensive access to a local real estate knowledge bank,” he says. Getting to know and glean information from investors with a range of expertise in many areas proved to be invaluable. “Joining a REIA means you have access to not only that knowledge but systems and forms only available to members. Like sales contracts and attorney drafted leasing forms, systems to check into prospective tenants and access to industry professionals at a reduced rate.”
In his first three years of real estate investment, Jeremy bought one house per year. After his third year, that investment number jumped to four properties per year and hasn’t gone down since. Jeremy currently owns 15 free and clear rental properties. But his main love and focus is on flips.
For Jeremy, buying those properties that other real estate investors shudder at is his main drive. “These properties offer me the greatest return in dollar vs. time. I can be creative in moving walls, adding bathrooms, opening walkways and selecting usable space. Because everything is going to come down to the studs, I get to be creative and think about my end buyer and not about the hardwood floors that I don’t want to damage or the new drywall the previous owner just had installed,” he says.
Jeremy was able to take his love of flipping and the success he has found from it to the next level in the pilot TV show “Gritty to Pretty”. The show aired on the DIY Network in February, and it features Jeremy and his team’s process of buying, revitalizing, and flipping old houses in Kalamazoo, MI. One of the main goals of the program is to show that houses are worth redeeming and don’t always need to be torn down.
As always, the road to success is never easy, and there have been some bumps along the way. One of Jeremy’s biggest mistakes while starting out in the business was not carrying liability insurance on a rental. “I kept my properties up to snuff early on, and I assumed that that would be good enough to get and keep a good tenant. I was wrong! I had a tenant and her friends sue me after claiming they fell down a set of front steps.” This mistake cost him about $10,000. One of his biggest tips: “Get insurance!” he says.
Jeremy also advises those looking into flipping houses to go slow, stick to cash, and to know your market. On going slow and sticking to cash, Jeremey says “You’ll always hear about someone using OPM (other people’s money) and making a gazillion dollars per year. They have many more sleepless nights than the person doing a few properties per year and operating with no debt. Take your time and grow accordingly. You make wiser choices when you’re using your own money. I’ve gotten to this point all from a $4,000 car I sold at age 19 to buy my first house. Not from mortgages or OPM.”
Jeremy says he is often asked about why he only buys properties in Kalamazoo, to which he replies: “Because I wholeheartedly know this market. I can tell you what the value of your Kalamazoo property is in a few minutes and without fancy apps or a licensed professional real estate person. I take the time to understand what the buyers in this market require, and I give them a few niceties to make them want the home. I price my properties $5,000-$10,000 below market value because I buy them $20k-$30k below their current market value at the time I acquire them. My properties sell within seven days of listing with many not lasting the first 48 hours.”
The future for Jeremy is looking bright as he is also about to finish up his biggest deal yet; lake front properties on Long Lake in Kalamazoo. He had been eyeing the property for a while. “I was able to purchase the lake front property for $27,500 and the one acre property for $1,200 (Yes $1,200). I split the 1-acre property into 3 parcels and I am building one house per parcel. I am a builder so my cost to build will be $70,000 for each home. The value of each property will be $300k-$350,000. So, for an investment of $240,000 I will have about $1,000,000 in lake front value. My family loves being on the water so this is by far the best investment I have done!”
There are many highlights in making a career out of investing in real estate, but the best for Jeremy is being able to spend time with his family. “My favorite part of what I do is being able to wake up with my young kids and have the time to eat breakfast and watch Llama Llama before school with them every day. I don’t set any meetings before 10am because that time is for family. Owning (paid for) real estate allows me that freedom.”
For more information on the pilot episode of “Gritty to Pretty”, head over to the DIY Network’s website!