Hard Work: One Thing a New Real Estate Investor Should Focus On

Real estate investors come in all shapes and sizes. Some focus exclusively on small residential real estate fix and flips, others look at wholesaling, and still others dabble in small commercial projects. Not too many people invest in large commercial real estate projects like Chris Hanson of Hanson Capital, today’s guest on Truth or Comfort.

You might assume that Chris started with big deals that simply got bigger. Or, you might assume that he had an amazing mentor that helped him know what to do and how to do it. In both cases, you’d be wrong. Chris explains how he really got started and the one key that got him to where he is today.

Getting Started

Chris Hanson is the Principal of Hanson Capital Group, an alternative lender specializing in collateral-based, hard-money transactions within the real estate market. He currently specializes in large commercial projects, but that is not where he got started. In fact, his start resembles the start of most real estate investors.

At the age of 25, he was dating a girl whose father owned a large yacht. He wanted a lifestyle that led to a yacht and asked how someone like himself could get there. His girlfriend’s father said real estate and suggested looking at foreclosures as a way to begin. That was in 2008, at the beginning of the mortgage crisis.  

Chris followed that advice – the only advice he was given about real estate – and went to a foreclosure auction where he purchased his first deal for $36,000 as a fix and flip. He purchased another two in quick succession.

Success or Not?

When Chris talks about his beginnings, he admits that not everything he did was monetarily successful. He also admits to not having very good methods. 

For instance, with his first few fix and flips, he didn’t even know what to fix or who to hire to fix it. He relied on a real estate agent to help him find the right properties and Craigslist to find someone to throw on some paint and change the carpet.

During this time in Phoenix, houses were depreciating quickly. The entire goal was to buy the house, do a few cosmetic fixes, and get it back onto the market before losing money. Sometimes he was successful. Other times he was not. He determined he wasn’t good at fix and flips. In his own words, “I didn’t have an eye for it.

Although the fix and flip wasn’t always successful, he did create a bidding company and eventually moved to purchasing apartments. He found that with apartments, he could make more money.

Lessons Learned

Chris’s success came more in the form of lessons learned. He didn’t have an amazing mentor that told him what to do and when to do it. His girlfriend’s father did give him the tip to start in foreclosures, but didn’t give him the specifics as to how that was done. And, at that time, resources on the process were scarce.

Nonetheless, he jumped in, and purchased a few properties. With each one, he learned along the way. Here are some of the lessons he learned:

  • Don’t pick up a hammer. Instead, pay people to do what they do best. 
  • Even though you shouldn’t pick up a hammer, you should learn what those with the hammers are doing and why. It will help you know which properties to purchase and which ones to avoid.
  • Properties with “more doors,” like apartments, are more lucrative than single-family residential properties.
  • The best way to learn about the real estate market is to be involved in the market. He has learned what works in different portions of the real estate cycle by doing deals during different portions of the cycle. 

However, his most important lesson is this: There is no replacement for hard work. 

He believes that his ability to work hard – harder than the next guy – is what helped him achieve his current real estate investing success. If you are willing to get involved, learn from your mistakes, and work hard, then you will find real estate investing success. The key to success is not easy, but it is simple.