The Entrepreneur’s Journey: Investing in Value-Add Apartments

Real estate is the tool that can help you build the life you ultimately want. How big are your goals? Are they bigger than your fear? Many people come into real estate with a self-limiting belief about what you can do, but Sterling White is a success story that will destroy your fear-based excuses.

Sterling thought you had to have a lot of capital to invest in real estate, and that it was only for the wealthy. He was also afraid that if he didn’t know what he was doing, then he’d lose everything. But Sterling’s upbringing was humble: Section 8 housing, a single mom, and a fraternal twin brother. He decided to use his beginnings as fuel for his entrepreneurial journey, and he’s relied on multi-family investing to help him.

Why Value-Add Apartments are a Great Deal

Sterling has $10 million of equity in capital invested in his portfolio, and a $26 million portfolio of residential and commercial property. And he chooses to focus on a very specific niche: Value-add apartments or workforce housing. They have to have between 75 and 160 units, they need a little bit of work, and they were built between 1970 and 1990.

Sterling likes these types of multi-family units because they’re like the bread and butter in the real estate world with solid blue collar residents. Unfortunately, there are a limited number of these units, and many of them are owned by mom-and-pop operators. So Sterling can’t rely on brokers to find leads.

Some of these sellers are in their seventies and eighties, and while they want to retire, these apartments are also like their babies. They want to entrust their workforce housing to a new generation that will take care of them. Sterling’s buy-and-hold strategy is attractive to these old school landlords, and he has focused on building relationships with them as part of his buying strategy.

Real Estate is All About Relationships

Those of you that are straddling the fence between commercial and residential may still be relying on brokers, but Sterling’s strategy is all about beating the brokers to the punch. Chasing down public records to find owners’ phone numbers is the minimum amount of effort an investor has to make, but this strategy still works.

When you’re buying, you’re still selling. In a way there’s a sales process, and you have to be willing to get kicked in the face. When Sterling talks to sellers, he tracks down their phone numbers and gives them a call. And if they blow him off, he might politely follow up with a visit by their apartment complex. Of course, all of this is done ethically.

It’s tough for a lot of people to hear that they’re going to get rejected a lot, but according to Sterling, the key to getting off market deals is persistence and consistency. He’s willing to get hung up on. I love his strategy because anyone can do this. There’s no silver bullet software or magic marketing strategy. It’s just you calling the owner and getting to know them and their business.

Blowing Up Self-Limiting Beliefs

Coming from a humble beginning, one of the biggest self-limiting beliefs that Sterling had was that you had to be rich to invest in real estate. It took a mentor to shatter that belief for him. He quickly realized that he could find a deal and manage the whole process, and an investor would happily put up his own capital and let Sterling manage the real estate transaction.

I remember my big pivot when I had pancreatic cancer in 2011. I was in the hospital recovering from massive surgery and I was still able to close two deals and make $80,000 because I had private funding. I could control the deal because I had the capital. So like I always tell you guys, “Funding equals freedom”.

And while Sterling acknowledges that it’s a cliche, he says the old saying is true that if you do what you love, you won’t work a day in your life. He’s found that he loves marketing and making deals. So he outsources the rest to a competent COO. He’s realized that he doesn’t have to do it all to still build the life that he wants as long as he focuses on building a brand around his entrepreneurial journey.

Build a Brand with Marketing

As a huge contributor to Bigger Pockets, Sterling is constantly adding value to the real estate investing community. For those investors who are looking to build their brand and their portfolio, as they look for deals or raise capital, he recommends that they use digital marketing to build up their personal brand.

The era that we’re moving into is one in which the entrepreneur himself or herself becomes the actual brand. Everything you do and say will reflect back on your company because you yourself are literally the brand. Whether you choose video, blogging, podcasting, the point is to get your face out there to build relationships and generate leads with your audience.

Sterling currently prefers video because he thinks it’s just as powerful as sitting one-on-one with someone. And with the current algorithms on Facebook and LinkedIn, they’re more inclined to push out your video content as much as possible. By relying on what the social platforms prefer, you can amplify your branding message even more.

CONCLUSION

For Sterling White, value-add apartments are the key to his entrepreneurial success. He likes the long-term strategy they present, and he loves the challenge of finding these apartments. Every real estate entrepreneur starts somewhere, and by focusing on building a brand and developing genuine relationships with sellers, they can build the life they’ve always envisioned for themselves.

Be daring,
Josh

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