JF1941: Growing A Real Estate Investing Business With Family & Friends with Rome Lingenfelter
We’ll hear Rome’s investing story today, he has been a full time real estate investor for the last year. His wife is also full time investing with him and they are growing the business together. We’ll also hear what Rome is doing with his 12 year old son to teach him some of the business. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
Best Ever Tweet:
“We follow a checklist when we got to purchase something” – Rome Lingenfelter
Rome Lingenfelter Real Estate Background:
- Real estate investor, growing business with family and friends
- Has a passion for educating others and helping them reach financial freedom
- Is involved in a 147 unit syndication, currently negotiating her first mobile home park
- Has flipped over 24 houses
- Based in Portland, Oregon
- Say hi to him at romeling2007ATgmail.com
- Best Ever Book: The Creature From Jekyll Island
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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Rome Lingenfelter. How are you doing, Rome?
Rome Lingenfelter: I am excellent today, thank you for having me on.
Joe Fairless: My pleasure, and glad to hear it. A little bit about Rome – he is a real estate investor, has been growing his business with family and friends, has a passion for educating others and also helping reach financial freedom. Based in Portland, Oregon, and his wife has been on the show as well… So they have a 12-unit building, also have been involved as a limited partner on a 147-unit syndication, and they’re negotiating their first mobile home park, as well as they flipped over 24 houses. With that being said, Rome, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Rome Lingenfelter: Sure, absolutely. Originally, my wife and I started our business about seven years ago. We have made the majority of our growth in both the size of our business and our profits mostly because we’re in an equity market… So in fixing, flipping and wholesaling. But I would say that we’re repositioning now into more multifamily, and as you’ve mentioned, the mobile home park. And we’re looking more and more into the multifamily markets.
Joe Fairless: Okay, got it. Are you full-time in real estate? And if so, what were you doing prior?
Rome Lingenfelter: I am full-time in real estate now. I stepped away from a corporate position. I was a manager with a national grocery store chain for about 16 years, and my wife and I started our real estate business and just built it up over time. She stepped away about three years ago, and I stepped away about a year ago… And this will be our best year so far.
Joe Fairless: How did you determine when it was time to leave the corporate world?
Rome Lingenfelter: I didn’t have enough bandwidth to do both. The corporate world was easy compared to this, but just balancing time — I was scrambling on every break and every lunch to field calls… And we are not the traditional pair; my wife tends to be the contractor and negotiates the deals, and I tend to be the numbers and kind of contracts, back-office type stuff… And I was spending way too much time trying to catch up, and not enough time with my family. I have a great son, Max, that we just all enjoy doing stuff together as a family… From working in our business, to camping, hiking, and all that great stuff.
Joe Fairless: How old is your son?
Rome Lingenfelter: He’s 12 now.
Joe Fairless: What are some things you’ve done to teach him the business?
Rome Lingenfelter: It’s a really good question. I’ve really gone to his strengths. Because he’s an only child, he’s always been around adults, so he relates to adults as well or better than he does with kids his age. So we did lots of door-to-door sales with him, so he’s very confident in those circles. I’ve had him help me on some rehabs… Things that are adequate for his age. But he started getting into social media, so he’s started to do some work on our social media, which is still growing, still pretty rough…
I would say one of the things that was kind of a sea change event for me was not just reading Kiyosaki’s stuff, but playing his Cashflow 101 game. I’m a hands-on guy, so I started Max at a very young age – probably about 4 or 5 – on Cashflow. And even tonight we’re gonna go to one of the local REIAs and play Cashflow. It’s something he really enjoys doing. And he sent out his own mailings this last year, and got some good responses. We haven’t bought any properties from it, but he had really good responses from it.
Joe Fairless: So you mentioned among a lot of things door-to-door sales, and that to me – holy cow; adults have a hard time — I would have a hard time with that. Tell me about that process with him. So in our neck of the woods the way the Cub Scouts (before they go to Boy Scouts) raise money is through Christmas reeds sales. When I was a kid I think they had us sell candy. But I’ve just gone around with him, and he’s incredibly courageous. He loves people, so just going up, knocking on the door, practicing his little script, getting it wrong, getting it right… And it’s hard to say no to a Boy Scout who’s in a uniform and whatnot…
I think the second year in he had one of the highest sales of anybody in his troop, and his last year that he was in, he won. He was the top salesman for selling Christmas reeds. And he’s actually taking on his own. So now, being a Boys Scout, they grind up Christmas trees, but he has still continued on, because he has so many faithful clients who are like “Please come around.” So even now he raises money that way.
Joe Fairless: Taking a look at the properties that you’ve worked on, what has been the most challenging one for you?
Rome Lingenfelter: Boy, we’ve had lots of challenging ones. I would say probably the one that we learned a lot from was my wife and I – and we had a third partner – went in on a property that was almost a million dollars. It’s in one of the hottest areas in the Portland market, and our third partner just raved about this, and it looked like the numbers were gonna pencil out. So we borrowed some money to put a down payment on it, which we never recommend that you do… And not only did we have to pay interest on the borrowed money, but the person who was selling it to us – even though we said “Hey, we went through the inspection period” and we [unintelligible [00:06:33].18] money back – the doctor who owned the property decided to sue for the earnest money; he thought he deserved it. So of the 25k that we put down, I think we got 10k back. And then we had to pay interest on the rest of it, so… That was ugly.
Joe Fairless: Given a scenario where you’re in that situation or about to be in that situation again, what are some things you’d do differently?
Rome Lingenfelter: I’d make sure that the numbers were more correct going in. I would make sure that things were tighter. If I didn’t have the money to put down on it, I would put a lot less down, and if they weren’t interested, I would walk away. I think everybody says it’s not the deals that you don’t get that [unintelligible [00:07:13].16] it’s the ones that you get and shouldn’t have. And this was definitely one of those. So I would just walk away from it. If you’re not willing to take 5k or 10k down, then we’re not willing to continue forward. That was my big lesson there.
Joe Fairless: What’s been a challenge growing the company, now that you two are full-time and have been full-time for a little while?
Rome Lingenfelter: I would say our biggest challenge has been marketing, and just getting our systems up and running. I think that’s what we still struggle with. We know where to get deals and we know how to work through it, but I think our plate gets so full… I think right now we have about five projects going on right now, and when we’re neck-deep in projects and getting things out to market, which is where you realize the money that’s coming in, that our marketing wheel kind of grinds to a halt. For this winter, if things kind of quiet down, that’s really where I’m gonna put a lot of time and energy – just getting the systems so it’s just that smooth-running wheel, which I don’t have at the moment.
Joe Fairless: What are some things you plan on doing?
Rome Lingenfelter: I’m going to break my processes up so no one person has access to all of it. I’m going to hire a VA, or maybe two. I really think that because of how busy my wife Amy is, I think we’re gonna get an assistant for her. And mostly, just breaking it up into pieces and just being clear of every step, and then assigning those, and then revisiting. I have good experience managing, but designing systems is not something I’ve ever done before.
Joe Fairless: And you mentioned you have good experience managing that… I imagine it comes from your corporate experience prior to doing this full-time.
Rome Lingenfelter: Yes, correct.
Joe Fairless: What are some tips you have? Or better maybe, what are some things you implement that you learned in the corporate world, that you do now?
Rome Lingenfelter: I think clarity is super-important. Making sure that everybody knows what their role is. In the beginning Amy and I used to bump up with each other, like “Hey, stay out of my lane.” She is a much better contractor; she has really good vision, so making sure that I let her do what she’s incredible at, and stay focused on my parts.
I’m a hands-on person. I tend to like to swing a hammer, I tend to like to do physical work, and I have to step back from that and really look at jobs that would be better for us to hire out. So that’s one thing – let people do what they’re good at, so putting the right people in the right positions I think is definitely someplace that that’s been helpful.
And again, customer service. Always taking care of people, whether you’re buying houses, or selling houses… Communication followthrough – I think that’s huge. I think a lot of people miss out on that. They get so caught up in the numbers that they miss out that it’s a people business.
Joe Fairless: From a management side, what are some ways you bring the people business component to life?
Rome Lingenfelter: I always do my best to [unintelligible [00:10:09].00] somebody, regardless of — if I’m selling a house, I usually give a basket, or some thank you gift. I think the last impression — I think somebody a lot smarter than I said “The last impression is a lasting impression.” Making sure that there’s just a pop of “Hey, that was a really good experience.” Even if the rest of the experience was bad, if your last contact was really positive, I think that’s good. And then just follow through and follow up.
I think there’s so many deals that we’ve landed that have come years after initial contact. Just that follow up, follow up, follow up. And I think Amy is really brilliant at that. That’s something I’ve learned and gotten better at from a management, but — just those systems in place, of making sure that those things we do do well are done on every project.
Joe Fairless: Based on your experience as a real estate investor and entrepreneur, what’s your best real estate investing advice ever?
Rome Lingenfelter: Making money when you buy. I would say in the beginning if you can find somebody who wants to lend you money or be a part of it, you probably have a deal. If you can’t find somebody, it’s probably not a deal… And there have been so many times that we’ve been learning new aspects of our business, that we were able to fall down and make some big mistakes because we got such a good deal on the front side.
So I would say make your money when you buy; just always be aware of what you get it for, and don’t be willing to walk away from something that you want to be a deal, but may not be a deal.
Joe Fairless: And what are some of those big things that happen that you could recover from because of how you purchased it?
Rome Lingenfelter: We bought a property out in the middle of the country. It was an old 1930’s cabin. We picked it up for 40k, and we initially thought we were going to owner carry finance it, and that didn’t work… And it ended up that we needed to sell it for cash, but there were so many things wrong with the property we didn’t know about. It needed a septic system, and everything that was involved with that… It was pier and post construction, rather than on a foundation… And because we had bought it for such a screaming deal, when we turned around and sold it for 140k, because of all of the money we had dumped into it, we were still able to walk away with about 40k in profit on it. Whereas if we would have bought it for a “reasonable” price of 100k, we would have lost our shirts.
Joe Fairless: And what part of your due diligence process now will attempt to uncover that? Or maybe what have you done to enhance your due diligence process, to try and mitigate some of those things from creeping up again?
Rome Lingenfelter: Sure. Just making a checklist. If you’re gonna buy in an area that you don’t know, figuring out the right questions to ask… I had never bought a property with a septic tank before, and the person who sold it to us said “Oh, the septic tank was new in 2000”, and we didn’t go back and check. So just having a due diligence checklist. When somebody tells you – it’s not new advice, but it’s meaningful advice – listen to everything that people say, but just follow up and do your due diligence.
So just having a checklist and checking the septic system; pier and post – other houses in that area, do they have pier and post? Because then it’s not as big a deal. But definitely following a checklist when we go to purchase something.
Joe Fairless: What’s the most recent thing you’ve put on that checklist?
Rome Lingenfelter: The most recent thing… Let’s see. Making sure that I am insulated from lawsuits. So setting up either a good relationship with a lawyer, or an accountant, and making sure that every way that I can protect myself, I am. Because much like California [unintelligible [00:13:48].18] becoming more and more of a litigious environment, and even when you do the right things and you take care of people, people will sometimes wanna come after you, so… That due diligence list is make sure you have a good lawyer in place.
Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?
Rome Lingenfelter: Absolutely.
Joe Fairless: Alright. First, a quick word from our Best Ever partners.
Joe Fairless: Best ever book you’ve recently read?
Rome Lingenfelter: Recently read… I really liked the Creature From Jekyll Island. I thought that was an incredibly well done book.
Joe Fairless: What’s the best ever deal that you’ve done?
Rome Lingenfelter: We wholesales a duplex and made about $160,000. So that was pretty incredible.
Joe Fairless: Yes, that is. Tell us how you found it and how that went down.
Rome Lingenfelter: Sure. We found somebody who was way behind on their taxes, and they also owed money to the local municipality. And just through [unintelligible [00:15:16].01] and the only contact information for this person was — I believe it was in New Mexico. So we had mailed to them, and the mail had bounced back to us… And I would say any of those things that bounce back – those are gold. So I dug into it, I did some skip tracing, I followed relatives, I finally tracked this guy down…
He lives in California and he hadn’t seen the property in over ten years. He had had a lady who lived there most of that time. Seriously a cat lady – she had over 30 cats. She had poked a hole from one side into the other side, and the cats lived in the other side. And for him – he had left his old life behind, ex-wife and all that… But my wife was able to negotiate a deal with him, and he was happy with it, and then we negotiated down with the city on the liens, and it penciled out. It worked out incredibly well.
Joe Fairless: Best ever way you like to give back to the community?
Rome Lingenfelter: I really love to educate, so I started with my son, and we’re doing more and more stuff with Cashflow. I think the future for people to be wealthy is to think bigger, think that they can, and think like an entrepreneur, rather than an employee. So I think Cashflow is a great way to adjust people’s brain, especially at a younger age. So definitely financial education.
Joe Fairless: And how can the Best Ever listeners learn more about what you’re doing?
Rome Lingenfelter: You can visit our website, we’re at www.rmrealestatesolutions.com, or you can reach out to me at firstname.lastname@example.org. We always have new and interesting projects coming up, and we absolutely love to help people learn more about real estate. We’re passionate about it.
Joe Fairless: Well, thank you so much for being on this show and talking about – from a management side of things – how you take your corporate experience and how that translates into now you being a full-time real estate investor. Some challenging projects along the way, and things that you do to mitigate the risk moving forward, as you build that due diligence list, some things that you’ve added recently.
Thanks for being on the show, Rome. I hope you have a best ever day, I enjoyed it, and we’ll talk to you again soon.
Rome Lingenfelter: Thank you so much.