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Success in real estate is often a blend of knowledge, partnerships, and strategy. Steven Honig, a seasoned real estate investor, shares his insights on how valuable relationships and strategic decision-making can lead to sustainable growth.
His journey from his first property purchase to owning hundreds of units underscores the importance of clear communication, calculated risks, and adaptability. For those looking to grow their business and generate motivated seller leads, Steven’s insights offer a roadmap to building lasting connections and making informed investment choices.
The Power of Clear Communication with Brokers
When it comes to building a real estate portfolio, working with brokers who understand your needs can make all the difference. Steven emphasizes the importance of communicating exactly what you’re looking for, creating a sense of loyalty and trust. Here are some of the key benefits Steven highlights when it comes to building broker relationships:
- Establishing Trust: Brokers are more likely to send you deals when they know your specific criteria.
- Staying Top of Mind: By being clear and consistent, brokers are encouraged to think of you first when a suitable property hits the market.
- Gaining Exclusive Opportunities: When brokers know you are a serious, reliable buyer, they’re likely to give you first dibs on deals before they’re publicly listed.
Developing strong broker relationships has been instrumental in Steven’s success, allowing him to close deals confidently and reliably.
Starting Out: The Importance of Partnerships
Steven’s first deal happened thanks to a close friend and mentor who had been in the real estate business. Their first joint venture—a fix-and-flip property—gave him critical experience and a network to build upon. Key takeaways from Steven’s early experiences include:
- Finding a Mentor: Steven attributes his initial success to the guidance of a friend who was already established in real estate. A mentor can help navigate early challenges and accelerate learning.
- Starting with a Partner: Pooling resources with a partner helped Steven buy, renovate, and sell properties without shouldering the entire financial risk alone.
- Learning from Every Deal: Steven’s first deals weren’t huge successes, but they taught him valuable lessons. In real estate, each deal—whether profitable or not—can provide insights for the future.
Adapting to Market Conditions: Steven’s COVID Experience
When the COVID-19 pandemic hit, Steven’s investment strategy needed to pivot. Despite the uncertainty in the market, he successfully navigated the crisis by relying on his flexibility and maintaining an open mind. During this time, he observed how buyer demand shifted and capitalized on properties that offered more space and outdoor areas as buyers moved away from urban areas.
Steven’s experience during the pandemic serves as a reminder to:
- Be Adaptable: Real estate markets can change quickly. Staying flexible allowed Steven to adjust his strategy without losing momentum.
- Focus on Emerging Trends: During COVID-19, Steven noted an increased demand for suburban properties with more space. Paying attention to trends can uncover profitable opportunities.
- Limit Exposure by Minimizing Debt: Steven avoided loans in this uncertain period, which helped him stay financially secure without the pressure of looming repayments.
Why Steven Shifted from Fix-and-Flips to Multifamily Rentals
After his initial success, Steven began focusing on multifamily rentals and wholesaling rather than fix-and-flip deals. This shift was strategic, allowing him to move from high-risk, short-term projects to more stable, cash-flowing properties. The main reasons behind this shift include:
- Steady Cash Flow: Unlike fix-and-flip properties, which provide one-time gains, multifamily rentals offer a steady, reliable income stream.
- Lower Vacancy Risk: With multifamily properties, a single vacancy doesn’t threaten the property’s profitability, unlike with single-family homes.
- Potential for Value-Added Upgrades: Multifamily units provide more opportunities to add value, increase rent, and subsequently boost the property’s overall value.
Today, Steven focuses on growing a portfolio that balances income and growth potential, avoiding the volatility that often accompanies fix-and-flip investments.
Managing Real Estate Properties In-House for Better Control
Managing properties in-house instead of outsourcing to a property management company has been a key component of Steven’s approach. This hands-on approach helps him maintain better control over property conditions, tenant relationships, and overall cash flow. In his words:
- Direct Oversight: With in-house management, Steven can stay on top of maintenance issues and ensure every dollar is accounted for.
- Building Relationships with Tenants: Tenants are viewed as customers, creating a sense of trust and satisfaction that often results in longer leases and fewer vacancies.
- Avoiding Management Fees: While property managers can be helpful, their fees reduce profitability. In-house management allows Steven to keep those costs in check and apply them towards growing his portfolio.
Tips for New Real Estate Investors
For those entering the real estate field, Steven has a few tips based on his experience:
- Build Broker Relationships: Trust and clear communication with brokers help you access quality deals. Keep brokers in the loop about your specific investment criteria so they can keep you in mind.
- Find a Mentor: Lean on the experience of others, especially during your early deals, to avoid costly mistakes.
- Adapt to Market Conditions: Stay flexible in your strategy and be ready to shift based on market trends.
- Consider Multifamily Properties: With more rental units, you gain financial security and growth potential compared to single-family properties.
- Start with a Partnership: Sharing the financial load reduces risk and allows you to learn with the support of a trusted partner.
These steps are practical ways to enter the real estate market with confidence and avoid common pitfalls.
Setting Up a Portfolio: Wholesale and Buy-and-Hold
Steven’s current portfolio consists of both buy-and-hold rental properties and wholesale deals, giving him a diverse income stream. For aspiring investors, understanding the benefits of both strategies is essential:
- Wholesale Deals: Wholesaling offers quick cash returns and can be a stepping stone toward larger investments.
- Buy-and-Hold Rentals: These properties provide long-term cash flow, appreciation, and the opportunity to build substantial wealth over time.
Steven has separated these operations into distinct entities, managing them with his teams to ensure that each strategy receives the necessary focus.
How to Connect with Brokers and Win Deals
Steven stresses the importance of building relationships with brokers who understand his requirements. His advice for those looking to cultivate similar relationships includes:
- Be Clear and Consistent: Communicate your investment criteria clearly, so brokers know which deals will appeal to you.
- Present Professional Offers: When submitting an offer, include a “credibility packet” that showcases your experience, past deals, and reliability. This can make your offer more attractive, even if it’s not the highest bid.
- Leverage Past Success: Reference recent deals to demonstrate your ability to close and create value, reassuring sellers and brokers of your reliability.
This level of professionalism can help establish you as a preferred buyer, giving you access to exclusive, high-quality investment opportunities.
Grow Your Real Estate Business with Proven Strategies
Steven Honig’s journey in real estate shows that success comes from strong relationships, sound investment strategies, and adaptability. By leveraging broker relationships, working with trusted partners, and managing properties in-house, Steven has built a thriving portfolio with hundreds of rental units. His approach underscores the importance of commitment, clarity, and professionalism.
If you’re looking to grow your real estate business and attract motivated seller leads, take Steven’s insights to heart. Focus on building trust with brokers, staying adaptable, and managing properties effectively to build a successful, resilient portfolio.
