Austin lives in NYC which is an expensive market.  When deciding to get into real estate investing with his girlfriend, the numbers just did not make sense to invest where they lived.  To de-risk investing, they leveraged their family network to invest in a market where the numbers made sense!

Motivated by building wealth and passive income, they jumped in with the BRRRR strategy.  It can be fairly hands-on but definitely can also pay off.

If you want to reach out to Austin, you can get a hold of him via email.

What is your engineering background?

I graduated with a Comp Sci degree at the University of Michigan in 2016. Then I did an internship at JP Morgan and then went back full-time for 11 months.  I quickly found that the big company finance vibes weren’t really for me.

Then, I joined a smaller startup. I was the sixth engineer and the 13th employee at the time. It was just a small FinTech startup and flatter than JP Morgan.  I’ve been there since, for over three and a half years.  It’s been great, lots of growth for the company and for myself as well.

How did you get interested in Computer Science?

It wasn’t initially on my radar.  I think when I started at U of M I was thinking physics.  I knew that I wanted something in the math and science realm.

It didn’t actually occur to me until I had some friends that were doing it.  And I think there was a lot of cultural emphasis on it at the time.  It was just this big growing field.  And fundamentally I like solving problems and this was a surefire way that I’d be able to do that for a large portion of my career.

How did you become interested in real estate?

It definitely, wasn’t a long-standing thing for me.  It wasn’t something I was thinking about at a very young age.

I don’t think I was particularly entrepreneurial until much, much later in life, maybe mid-college is when I started getting some of those urges.

At the core of it was my girlfriend. We’ve been together for six years now and we met at Michigan.  Her dad is involved in real estate and put us on to some foundational books: Rich Dad, Poor Dad, and some other resources like BiggerPockets.  From there, we just gobbled everything up and were very interested in focusing on our financial health and the longevity of that.  We got very serious about planning our goals and what we could do to achieve our goals.

[He] put us on to some foundational books: Rich Dad, Poor Dad, and some other resources like BiggerPockets.  From there, we just gobbled everything up and were very interested in focusing on our financial health and the longevity of that.  We got very serious about planning our goals and what we could do to achieve our goals.

How did you get started once you realized that it was a good option?

Once we figured out that we need to start taking assets and growing assets and minimizing liabilities.  We started taking stock of our financial picture and being honest with ourselves. We thought about what our options were. My girlfriend is in finance.  She’s had a natural perspective on equities and public markets as well as private markets.

I think for me, I never really had the proclivity for stock picking or trading, or anything like that.  And then it occurred to me that real estate was such a broad category.  And fundamentally, you had so much more control.  You’re in the driver’s seat when it comes to the products that you’re buying and incorporating into your broader portfolio.  That was one of the things that I really ended up loving about it.

Instead of me going to TD Ameritrade or some broker and saying, okay, here are some products that you’re offering and buying ETFs or options, I get to be the person that creates the product.

I get to pick my strategy and metrics.  I pick my underwriting strategy and metrics.  And then you just need patience from there.  And a little bit of savviness in terms of understanding the target market. That inversion of control is really why we gravitated to real estate.

I suggest to anyone trying to get into it, leverage your resources, leverage your existing relationships, and understand how you can be of use to other people.  And reciprocally, what they can create for you.

I suggest to anyone trying to get into it, leverage your resources, leverage your existing relationships, and understand how you can be of use to other people. And reciprocally, what they can create for you.

We piggybacked off of my girlfriend’s dad, who has a lot of rentals in Massachusetts.  We started looking for markets there.  Ultimately, we wound up leveraging his contractor network to do a BRRRR in Worcester, MA.  That was a three-family in early 2019.

That was our first deal ever.  I just had set up a bunch of email alerts, very basic stuff on realtor.com. And then being patient every time a lead came in, we underwrote it.

I was just doing the math to do some quick diligence, call water and utility companies to get a sense of backward-looking utilities, and do as much math as I could ahead of time on these leads.  And then one of them came up and it looked good. And we just pulled the trigger.

We’d only been looking for a month before this one came up.  It was very quick.  It was exciting and lots of nerve-wracking moments as well.

What did you learn from that experience?

I was fortunate that I was not optimistic with my underwriting.  And I would definitely emphasize that.  There are so many unknown unknowns in that situation.  The quirks of the submarket have an impact that would have on the deal itself in terms of what tenants you can rent to.

You can’t magically will away the underlying metrics of your sub-market.  For example, for your market or asset class, if there’s historically 85% occupancy, you can’t look at a deal that is at 72% occupancy and think you’re going to bring it to 90.  It’s just, you can’t.

I learned to double down to budget for a lot of unknowns.

How has your software engineering background helped you with real estate investing?

Putting on the product hat instead of viewing it with the mindset of always searching for that MVP.   I look for a lightweight process that can get you 80% there. And I certainly view things with an eye for systems and scale.  These are all things that I think are very important.

Although to some degree there are times where I’m finding myself over-engineering and building things in-house when I shouldn’t be.  It’s definitely gotten in the way a little bit on that front.

Certainly, the systems approach has been very helpful in really understanding where I really need to spend my intention and where is the highest impact of the effort.

How many deals have you done so far since that first one?

Two so far.  We did one in March of 2019 and then closed in the next one in May.  It’s not as though we don’t want to continue growing.  There’s just been a large uptick in interest in general, property values have gone up in western Mass.

There has not been a ton of supply that meets our criteria.  But fundamentally the strategy was the same in the two properties.  They were two BRRRRs where we have a large value add component.  We’re wrapping up the second refinance.

Obviously, COVID threw a wrench into things in terms of access to contractors and, qualified renters.  But we finally got things in a good stable place and about to pull out more than we put in because we bought in cash and did all the repairs in cash.

What is your long-term goal for your real estate business?

We want to scale.  We viewed this as a vehicle to long-term growth and financial independence.  Eventually, we want to passively invest as LPs in large multifamily syndications.

We want to build more of those relationships.  It is also important to learn from, rock stars in the broader community, like you guys.  We love learning. And we’re very inspired by what you guys are doing.

What advice would you give another engineer who’s getting started or thinking about investing in real estate?

I would say find the right balance of planning and execution.  When you’re an analytical person, there’s a tendency to overanalyze and basically prevent you from taking important steps.

If you’re younger, understanding that your investment horizon and the amount of time that you have as an investor is one of your largest assets.  Messing up early on is really no big deal at all, as long as you’re intelligent about the risks that you’re taking.

If you’re younger, understanding that your investment horizon and the amount of time that you have as an investor is one of your largest assets.  Messing up early on is really no big deal at all, as long as you’re intelligent about the risks that you’re taking.

The thing for me was that I was definitely afraid initially because we were putting a lot of our own capital on the line.  And obviously, that first step was very scary.  Understanding where your largest risks are is helpful.

For us investing in Massachusetts, there are a lot of really old houses that were built with lead paint.  There’s this big led paint program and essentially you can’t rent to anybody with kids under the age of six.  Understanding where those risks can actually occur.  Some things you won’t be able to do much about, but there are other things we can take small steps to de-risk that situation.

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