Published by Trey Stone on
Sep 24, 2020 4:07:00 PM
Host- Trey Stone
Co-Host- Cliff Norris
Topic- A Real Success Story from Investing with Trey
Cliff Norris’ Background
Cliff Norris started investing in real estate with Trey Stone in 2012. He first learned about Trey from this radio show on KSEV.
Cliff is an electrician who first started investing in single family homes. He’s been successful with those investments but he was spending more time than he wanted managing those properties. He decided to use his 401ks and IRA by putting that money to work in multi-family investments. He chose to invest with Trey because he appreciated the transparency Trey and his team offered.
Some people aren’t aware of how 401k’s work after you leave a job. You can actually move the 401k funds into a Rollover IRA. You need an IRA conservator to help, but you can use that money towards certain investments. Cliff did this with his retirement savings and turned $200,000 to $700,000. He explains that it’s about consistency and re-investing in new deals every year.
Cliff’s Advice to New Investors:
You have to take a risk.
Learn the deals and vet the people who are putting the deals together. Transparency is key.
Be open to new and different investments that are out there.
With Multi-Family Real Estate Investing…
You can make money and do something good for a community at the same time. Cliff and Trey reminisce about the difference they made in a community with one of their deals: La Estancia. Most of the multi-family properties that Trey and his partners invest in are extremely depreciated properties. They often come into a property and make it safer for the community by adding lighting and eliminating any crime activity from the properties.
Trey admittedly invests in this type of real estate for the wealth it provides but expresses how great it feels to help a community in doing so. In this particular investment with Cliff, they made a 60% profit on the deal while helping the residents who lived there.
The Importance of Choosing the Right Lead Investor
Another one of Trey and Cliff’s investments, La Catalina, was so depreciated that the deal actually took longer than some of the partners wanted to turn a profit. The neighborhood was rapidly gentrifying and Trey’s market survey suggested that the investors needed to do more than they originally planned to renovate the property.
Trey brought everyone together and the partners voted for Trey to buy them out of the deal. The partners saw a bigger profit than they anticipated, earlier than they thought they would and were pleased with this result. Trey did this because he knew La Catalina would eventually become extremely profitable once they finished the additional renovations, but he understood that the timeline was hard for some of the partners. Trey also values his relationships with his partners and wanted them to be satisfied with the deal. When choosing a lead investor, it’s important that you know they value long term relationships and that their actions demonstrate that.
Trey further explains that he did not bring partners into deals between 2015-2020 because the market was not ideal for it. Some people expressed their frustration with that but for Trey, timing is everything. He did not want to take money from his investors unnecessarily, when the market wasn’t right. Trey emphasizes the importance of discipline and integrity in a lead investor.
“There’s always deals to buy but it’s not always the right time or the right price to be buying them and you don’t continue to do deals and bring people into real estate when they ought to be selling because it’s a seller’s market. Otherwise, that greed is getting in the way of what’s best for those investors.”
For Cliff, his successes investing in multi-family real estate with Trey has allowed him to help his five children financially. His number one motivator is helping this next generation. He also enjoys supporting his community anywhere he can.