The real estate market has had a ‘walk on eggshells’ air about it for the past few years. We know it started out looking good in early 2020, with low rates and solid employment numbers according to a Washington Post article, where the biggest concern was low inventory. Then came the global pandemic, and things changed; we heard tales later in 2020 about how the market was about to die. Then this year, we heard how the housing value bubble would burst. It did not. Yes, rates have gone up— and yet it seems, all is not lost.
Through the elections, people waited to see how things would shake out, hedging their bets with investing in general. So, is real estate safe now? In good times or the not-so-great, people are making money this way. It looks so easy, and many starry-eyed investors have tried to break into the real estate market, armed with their enthusiasm and some capital.
Maybe it’s not about the state of the market, the rates, or the overall economy, but something different. While it sounds easy, and many people attempt it, some find that there are just too many aspects of this type of investment in which expertise is required to be able to profit. To get more perspective, we asked an apparent leader in the industry. “The statistics for real estate investors are pretty abysmal,” according to Peter Vekselman of Partner Driven. “Only about 3-5% of all people who get into real estate investing are able to make any money.”
According to Vekselman, who has closed over 3,600 deals in the past 22 years, the problem (in any economy) is that it is a very dislocated and disjointed industry. Unfortunately, the numerous pitfalls, from choosing the right property to structuring a deal to construction and remodeling considerations—just to name a few, proved to be too complicated and formidable for most people to make any money. Well, after all, you don’t know what you don’t know and it’s hard to know everything when it comes to real estate. What if there was a different way to go about this business?
What You Don’t Know is a Problem
Learning the real estate business, what he calls “the head knowledge” is just the tip of the proverbial iceberg. Talking through the basics of the steps, Peter lists some of the places people get hung up. “There’s the world of marketing and the research it takes to do that well. Generating leads and talking to people, how to script your pitch and structure your deal; now negotiation comes into play. To close a real estate deal is a whole art form as well and varies from state to state,” he elaborates, “Capital is certainly needed so a loan or other ways to get the cash may be required in the process. Then, construction knowledge or reliable contractors are necessary, as repairs are often required.” He summarizes that just diving in without all of this expertise is akin to putting a puzzle together without all the pieces and the result is losing money.
“Real estate is a big business with enough for all,” shares Vekselman. However, one bad deal can wipe out fertile dreams of reaping real estate investor glory. “In real estate, there are 1,000,000 miles between knowing something and doing something. In a typical situation where an investor puts up tens of thousands to hundreds of thousands of their own dollars, there’s little margin of error.” Peter continues, “Whatever the mistake is, from the buy, the financing, or the deal structure, it always leads back to an exact dollar amount.”
The Learning Curve
Mr. Vekselman learned this the hard way and claims he is now helping to keep others out of the pitfalls he encountered. Regarding his background, Peter shared that he previously was in merchant services, and had owned 15 franchises handling credit card processing. When he sold that off, he needed to find what was next. The book, Deals on Wheels by Lonnie Scruggs made an impact on Vekselman. The Scruggs program revolved around mobile homes, and Peter recalls being beyond excited. He attended a seminar taught by Scruggs, and soon bought his first manufactured home.
Then, after jumping in with both feet Vekselman became the biggest broker in Georgia for mobile homes within just a few years, flipping about 100 a month. But suddenly everything fell apart in the market, so he tried to transition into more traditional real estate. Peter describes this as the time that it took him about three years to make no money. After going into the hole by over $750,000, he dug himself out about three years later. Eventually, Peter found a mentor who helped him turn everything around; in about two years he had turned a corner and was back to making money.
Alignment is the Key
This was a huge lesson to Peter and helped develop his philosophy about Alignment. Vekselman now lives by his own best advice: “Align yourself with people who know what they’re doing. It’s not just in real estate but in life in general. Don’t try to figure out everything yourself because there’s not enough time to do it and you probably don’t have enough tools and resources to absorb all the mistakes along the way. Also, some people just are not capable of doing certain things themselves. Alignment is the ultimate shortcut to success.”
Other secrets to success? Vekselman shares his belief in the overall concept that there are shortcuts in life. This goes back to alignment and having the right team. He also believes in the concept of creating time, such as getting up an hour earlier every day. In a year, that’s 365 extra hours to be successful.
Stay in Your Lane
To be successful, Vekselman teaches growth must be vertical, not just horizontal. As opposed to some entrepreneurs whose interests are many and are spread too thin, involved in everything, Mr. Vekselman teaches the model of excelling in one thing. “Find the one thing you are good at and passionate about, in which you have a skill set and that makes you happy— then you just scale upward,” advises Peter. Further, he indicates that all the techniques and strategies that he uses are the ones that have worked for the last two decades. He doesn’t try to branch out into things that could be risky and that he doesn’t know anything about. Vekselman sums this up as “staying in your own lane” and the focus here again is the juxtaposition of what makes you happy and that which you are also good at.
This can be applied to entrepreneurs at large, where there is much frustration and failure. Vekselman summarizes “One must be able to evaluate the progress and know whether you’re really doing good or bad— and this is not just financial. Because there’s so much to being an entrepreneur; it’s not something that everyone can just do and be naturally good at. And the pitfalls along the way are very expensive.”
A Partner Driven Vehicle of Success
What Vekselman has done is solve this problem of countless pitfalls and too much to learn by providing everything under one roof. Would-be investors can partner with Vekselman and get training and marketing, plus the technology needed and a support office to handle the myriad minutiae of closing conditions. There are also construction teams across US cities and teams of realtors to support the transactions. The profit from the deal is then split 50-50. Does this sound too good to be true? Well, hold on because it gets better. Vekselman says that Partner Driven also provides the capital to make these deals happen.
Vekselman says he perfected this model after recovering from his earlier misadventures in real estate investing. Peter’s success allowed him to have a brick-and-mortar location and he began to expand across the US. He continued to scale, always pushing toward more, eventually getting offices as far as California. Then the challenge was to keep growing beyond his 17 locations.
What he learned next is what Vekselman says is helping investors all over the country to be successful with his model: The importance of the right checks and balances, for homes anywhere in the country. A deal anywhere in the US can be put together, but the rights steps must be taken, considering so many factors, including the state the deal is in. According to Vekselman his broad learning curve and mistakes can now be your greatest opportunity.
Real Estate Right Now?
Now, this partner model has been Peter’s wildly successful brainchild in this way for the past 7 years. Besides the extent of the training and the depth of knowledge offered, Vekselman says this is such a popular program because it can be done à la carte. Some partners have done dozens of deals utilizing the training and some of the resources of Partner Driven, but not doing a full split model.
What about trying now, with the slump in the economy? Vekselman affirms that this is a good time to make money, saying, “So because tough times are creating motivation and things are being devalued this is a great time. We are seeing tremendous opportunities in our industry as a whole right now. There is always demand.” In addition, he points out that the rates for investors have not moved as much as primary residence loans.
The overall best advantage of having a team to help in successful investments seems to be the far-reaching access to the best opportunities and inventory. Then, no matter what the economy and the market do, your chances are better to come out ahead. “One of the best advantages,” says Vekselman, “is the way that they can find deals with deep discounts, so even with plenty of margin for profit, properties can be sold for a competitive price to move quickly.”
About Peter Vekselman: Mr. Vekselman is a seasoned investor and has been a leader in the real estate industry for over 30 years. He has successfully done over 3,600 deals. Today, he leads a team of real estate professionals who continue to close deals across the country. Peter’s passion is breaking down the barriers that hold people back from becoming real estate investors. He eliminates virtually every obstacle through partnering on deals. Peter provides 100% of the capital and brings his expertise & world-class team to actively partner on closing deals. Peter has helped hundreds of new and seasoned investors. Learn more at https://partnerdriven.com and IG @petervekselman.