Alex Gruye and Assaf Arie – All That Can Go Wrong When Buying a Rental Property

BIO: Alex Gruye and Assaf Arie are real estate property management brokers in Twin Cities, Minnesota. They’re partners at Lion Rock Property Management who handle real estate investments, manage portfolios, properties, etc.STORY: A group of gentlemen approached Alex and Assaf to manage some single-family homes they had invested in. These properties started as a bad investment, but the duo restored them and turned them into tier-one properties. They later sold them for double the money the gentlemen had invested.LEARNING: Proper due diligence is paramount. Have the proper team with the right experience to help you pick and manage your property. “Talk to a seasoned property manager; they’ll get you a lot of insight on the market.”Alex Gruye and Assaf Arie Guest profileAlex Gruye and Assaf Arie are real estate property management brokers in Twin Cities, Minnesota. They’re partners at Lion Rock Property Management that handles real estate investments, manages portfolios, properties, etc., and all of the headaches that come along with it.Worst investment everA group of gentlemen who had made their first multifamily investment in a couple of single-family homes came to Alex and Assaf for their property management services. The homes were in a less desirable, tougher side of town known for its problems.The owners had purchased the property blindly and with a lot of excitement, but it turned out to be their worst investment ever. The homes were in a poor state when Alex and Assaf started managing them. They received 14 pages of citations that were never even disclosed through the underwriting process. There were units where all of the windows were broken, and they had to replace every stove, every refrigerator, and every AC unit in all 20 units.Alex and Assaf planned to turn this from the worst investment ever to the best one ever. The properties were a tier-three, and they worked them up to a tier-one. The plan was to recommend the owners sell the property after getting them to tier one. There were months of management where they held their bill essentially to make sure the properties kept afloat and got where they needed to be to sell them for profit. They did this because they knew money was going to come in once they sold them. They knew they had to go in and push to get the units to look nice and spent an upward of $25,000 to make this happen.They were able to sell the units, and the owners doubled their money. They turned something that was literally from day one the worst nightmare to an investment that brought in double the money.Lessons learnedIn real estate, proper due diligence is paramount.Have the proper team with the right experience, especially when getting your property.Understand the area the property you want to buy is in. Visit the area at different times of the day and see what it is like; talk to the neighbors and inspect every unit before you buy it.Know the nuances of the investment. Understand how it works, know how to operate it, understand the market drivers and the opportunities in the area. Also know the risks.Andrew’s takeawaysIt doesn’t matter what the investment you’re getting into; you’ve got to do your research to understand it and make sure it’s a worthy investment.When buying property and you don’t have a lot of experience in real estate, go and meet experts in that area and talk about it before you buy the property. This way, you will understand a lot of elements involved in the purchase that you may not have expected.Actionable adviceTalk to a seasoned property manager; they’ll get you a lot of insight into the market.No. 1 goal for the next 12 monthsAlex’s number one goal for the next 12 months is to stay healthy, keep positive every day and continue on the path of helping investors with their purchases. Assaf’s goal is to make a 1% improvement daily and continue refining himself a little bit.Parting words “Your worst experiences are going to be your funniest jokes 10-15 years later, so take it easy when they happen.”Assaf Arie [spp-transcript] Connect with Alex Gruye and Assaf ArieAlex LinkedInAssaf LinkedInAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramTwitterYouTubeMy Worst Investment Ever Podcast