JF1379: Intercontinental Real Estate Investing: Investing In Texas While Living In China with Lauren Cranford

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Lauren and her husband are living in China and investing in real estate here in the States. We get an inside look at what (very) remote investing looks like, from the team members, to the properties, and the logistics of investing across the world. Lauren says the biggest factor to success when investing remotely is communication with your team and other people you work with. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!

 

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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. We only talk about the best advice ever, we don't get into any of that fluffy stuff.
With us today, Lauren Cranford. How are you doing, Lauren?
Lauren Cranford: Awesome. Thanks, Joe.
Joe Fairless: I'm glad to hear that. Why do you sound like you're in another country? Where are you located right now?
Lauren Cranford: I am in Shanghai, China. Literally, across the world.
Joe Fairless: Wow. Best Ever listeners, for the record, Lauren got up at 5:30 AM to do the interview; some of you over-achievers might be like "That's late!" Well, whatever. 5:30 AM is pretty darn early in my book. I'm grateful that she did that. Also, her and her husband went to Texas Tech University, so Gun's Up there; that's where I went to school.
A little bit more about Lauren - she decided to invest in real estate in 2016 to build long-term wealth and financial freedom through real estate investing. Since then, she and her husband have purchased eight properties and are adding to their portfolio as we speak. She's based in Shanghai, China; she's not buying Shanghai, China, so we're gonna talk about that. With that being said, Lauren, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Lauren Cranford: I would love to. My background is in commercial real estate. Before becoming a mother, and then not too long after that deciding to pick up and move over to Shanghai, China, adding to our portfolio as we speak, as you said, as well as looking into ways to diversify our portfolio, as well.
Joe Fairless: Your background is in commercial real estate. What specifically were you doing?
Lauren Cranford: I worked for a small pool service commercial real estate company in Dallas, Texas. I specifically was doing development, and then kind of switched over and actually became a construction manager. I was more on the construction side of things.
Joe Fairless: And why did you decide to move from Dallas to Shanghai?
Lauren Cranford: Through my husband's work. We were provided an opportunity to come over here and basically implement what my husband did in Texas, and for him to do it over here. So we thought long and hard about it - not too long - and decided we were up for the challenge and the adventure. That's what brought us over here.
Joe Fairless: How long have you lived in Shanghai?
Lauren Cranford: We've been in Shanghai three years, almost exactly.
Joe Fairless: From Dallas to Shanghai - high transition. Top of mind - what are some major differences that you've had to adjust to or you've gotten to experience?
Lauren Cranford: I would say that the first thing that comes to mind is the culture shock. We really chose to come into it with open eyes, open arms, open mind, and just really have the attitude of embracing the culture and learning the history, and learning why it is the way that it is, in the sense of how it's different than where we come from. My husband and myself had never lived outside of Texas before moving here.
Joe Fairless: Now we'll talk about your properties that you have purchased, eight properties - where are they located?
Lauren Cranford: They are all in Texas, in Lubbock.
Joe Fairless: Alright, Lubbock, Texas. Why did you pick Lubbock?
Lauren Cranford: We chose the Lubbock market because 1) we're familiar with it. My husband grew up in a small town not too far from Lubbock, and like you said, went to Texas Tech for our undergrad, and I actually stayed there for my masters. Then we have some family that's still there, so we go back quite often. Also, we have some long-standing relationships there, both personal and business, and it just made sense. So that's where we've kind of built our team who's on the ground for us, who are incredible, and a solid group that we obviously trust a lot. Besides that, also just looking at the market, we really liked where it was going, and the opportunities there matched our criteria.
Joe Fairless: Oh, dang it, you stole my thunder, because I was about to take the conversation there. I was about to ask - you didn't mention market fundamentals, so why was relationships more important to you than market fundamentals, but then you stole my thunder. Okay. So you looked at the market fundamentals, plus you had familiarity with Lubbock - got it.
Walk us through the first purchase and the challenges - if any - that you had being in China when you're buying in Lubbock, Texas.
Lauren Cranford: Sure. So before we got to the first purchase, we tackled what we believe is probably even more important, and that's the whole mindset aspect of it. But once we felt like we were at a good place with that, and ready to take action and make that step, we just sent our guys running. We said "Bring us anything and everything that matches our criteria", which at that point was a minimum of $200/month in cashflow, and 3-bedroom 2-baths.
They brought us the deal, and the numbers worked, so we put in an offer. I think it was only on the market for a day. The purchase price was 93k. We put about 12k into it, and it rented for $1,250.
Joe Fairless: I'm gonna use an extreme example to ask the question - so if you said "Hey, trusted team, I've got a million dollars. I want you to get me $200 in cashflow", then obviously, the numbers won't be as favorable for you. So did you have a budget range for your first house that "Okay, now $200 in cashflow makes sense from a return on investment standpoint?"
Lauren Cranford: Well, yeah, the way that we kind of approach a deal individually is we go to our guys first and say "Tell us what the potential rent range would be." They're really good at that; actually, on every single one, we've achieved the rent that they have given us. That's cool. So that's kind of where we start.
Then I work backwards. Instead of giving a price range -- generally speaking, we have a price range; but to get more specific, then I kind of work backwards with the purchase price plugging in to see after all the expenses what gets us to the $200 or above.
Joe Fairless: What skills do you use from your development and construction management days in the investing that you're doing now?
Lauren Cranford: Oh gosh, I would say probably the biggest one is communication skills. Obviously, that's huge. As we all know, it's a relationship business, not a real estate business... So I think communication skills is huge. Organization skills is big, and really just maintaining and keeping after the relationship skills; that's not just with our guys that are bringing us houses, but also the lenders, title companies... Anyone and everyone. It's constantly working those relationships and communicating what we're looking for, what our outcome is, how we can help them, and in turn how they can help us,
Joe Fairless: What advantage do you have investing in a city that is across the world from you?
Lauren Cranford: So I actually really like the way that you asked that question, because a lot of times people kind of say it in the reverse...
Joe Fairless: I know, that's why I did it that way.
Lauren Cranford: Yeah, you're good. Most people say "How the heck are you buying in Texas, from Lubbock?" So yes, well, it's not easy look at it in the reverse", like how you asked that question, and we look at it as "Wow, this actually provides so many opportunities."
For example, just throwing out a couple that come to mind - you guys in the U.S. are sleeping, so I'm able to really focus, get a lot done, and be the first e-mail in everyone's inboxes when they wake up. That's an opportunity.
Another big one is the time difference. Right now in Texas we're 13 hours in the future. That means that there's a shorter amount of time during the day; it's very early mornings like now and very late evenings for myself. However, that creates a really big opportunity, I think, because I'm able to still maintain productiveness of my life here, in China, but at the same time it provides a good opportunity to do business once our son goes to bed, and before he wakes up. For a mom, that's a win/win.
Joe Fairless: Yeah, I can imagine. So that was your first property, and now you have eight properties and you're currently adding to the portfolio. Can you talk to us about how you all went from property one to eight?
Lauren Cranford: Sure. I think that the biggest asset in helping us to scale that fast was we hired a business coach, Trevor McGregor. And I believe at the time when we hired him, we had three houses under our belt, and we were happy with that; in fact, I think that our goal for that year was 3-4 total, and I think that Trevor really helped us with just pushing us beyond what we even thought was capable. I think that no matter how hard we try, I think sometimes our limited beliefs and our mindset - even though I would say that I'm naturally a very positive person and a hard worker, I think that what Trevor helped us to do was stretch us further than we probably could have done alone. Also, as we came upon challenges, really helping us to come up with creative ways to approach those challenges and work through them and come out ahead... So I have to give credit there, for sure.
Joe Fairless: Well, loyal Best Ever listeners recognize Trevor's name, that's for sure. If you search "Trevor McGregor Joe Fairless", you'll hear probably three or four episodes where I've interviewed Trevor... Because I forgot about our connection with him, by the way. As you mentioned it, I was like, "Oh yeah, that's how we got connected with each other." I too have hired Trevor for over five years as a business coach for me, so I highly recommend him. You can search "Trevor McGregor" and I'm sure his website will come up.
So you hired a business coach, and that helped you all go from one to eight, from a mindset standpoint. From a financing standpoint, how were you financing those properties?
Lauren Cranford: So for us, we are fortunate where we have the husband's work. Our approach was that for the first ten, we are going to do traditional financing in our personal names, because that's what we've done thus far, and that's worked well for us. We created an LLC to use once we reach that maximum, which I believe is ten, in our personal name... So that's how we financed them.
As far as finding the deals, about half of those surprisingly came from the MLS, they were brought to us. Again, I think all of those only stayed on the market a day, some multiple offer situation... And then the others actually came from a call that I made off of LoopNet; I called a seller of a portfolio, and asked if they would be willing to break up their portfolio, and the answer was yes. I put our guys in touch with them, and that's how we got the rest.
Joe Fairless: Why not buy the whole thing?
Lauren Cranford: Well, funny you say that, talking about where we are today, and had we thought we would be here today a year ago, I don't think we would have believed it, but actually the past two weeks we've been working a large portfolio deal, a 53-unit portfolio, so that's pretty cool.
Joe Fairless: That is pretty cool. Are you under contract with that portfolio yet?
Lauren Cranford: Probably any day now.
Joe Fairless: Sweet. So the LoopNet one that you did buy some of those - was it a mindset thing, or was it just a financial thing for why you broke it up, versus buying all of them?
Lauren Cranford: I think it was probably at that point in time both, because at that point in time we hadn't really gotten to the idea yet - or the comfort level probably, I would say more - of using other people's money to get deals done. So that's a big thing - probably just recently we've really gotten to the point that we're comfortable doing that.
Joe Fairless: And now with the 53-unit portfolio, once you have it under contract, how would you structure that with other people who you bring in the deal?
Lauren Cranford: To go back to another point about the opportunities in China - our network here that we've built is incredible, and as we've kind of shared our journey and people learned what we're doing, they have high interest in somehow becoming foreign investors... Many of our friends here are foreign, from all over the world, and so for this particular deal it would just be us and one other partner, and we would be able to get it done with the two of us. We would structure it a 50/50 split, so for this deal it would be pretty simple. I wanted to keep it simple, especially for our first deal, and luckily, we were able to achieve that.
Joe Fairless: Excellent. And how did you come across the 53-unit portfolio?
Lauren Cranford: It was an off-market deal, and our manager has a client that had the portfolio, and was talking about possibly selling it. The word started, and he came to us and asked if we'd be interested. We said yes, and it went from there.
Joe Fairless: Based on your experience as a real estate investor, what is your best real estate investing advice ever?
Lauren Cranford: Oh, gosh... I think what I would like to tell your Best Ever listeners is just to remember that you don't have to do anything extraordinary to build wealth, but you do have to do ordinary things (I would say) consistently and habitually well. It does require persistence over time, and discipline; if they're committed and take action, every single person out there has it in them. They're capable, they have enough, and they can do it... And just to remember that it's not a marathon, it's a sprint... And most of all, to enjoy it, and have fun.
Joe Fairless: You said it's not a marathon, it's a sprint. Did you mean, "it's not a sprint, it's a marathon"? [laughs]
Lauren Cranford: Yeah, sorry. Certainly it's the other way around.
Joe Fairless: I know, I know. I just wanna make sure. What are some of the ordinary things that you focus on doing consistently well?
Lauren Cranford: For me, every Sunday I look at my calendar for that week, and I think that time-blocking has become really big and just a habit; if you can look at your week, and wherever you are at in your journey - if you are just starting out and time is not on your side, even if it's 15 minutes every day, or you block out an hour and a half for one day, do something... Whether it's getting on the phone and making some phone calls, if it's self-educating... But do something that works to your end goal.
I think also if you keep your large goal in mind, then I think that that naturally will become habits that -- stay on track, stay committed, keep getting closer and closer to that goal... And it's really fulfilling along the way, too.
Joe Fairless: We're gonna do a lightning round - are you ready for the Best Ever Lightning Round?
Lauren Cranford: Oh, yeah!
Joe Fairless: Alright, perfect, let's do it. First, a quick word from our Best Ever partners.
Break: [00:18:23.04] to [00:19:11.15]
Joe Fairless: Okay, best ever book you've read?
Lauren Cranford: Building Wealth, One House at a Time. The author has never used his own money to buy a house to this day, so that's a really good one.
Joe Fairless: Wow. Okay, I'll check that out. What's a mistake you've made on a transaction?
Lauren Cranford: I think that for the house that we actually lived in in Texas we decided to lease it out upon us moving here, and we did not take the time or do enough research, and we hired a property management company, to be honest, based on fees, and we really learned the hard way that that ended up costing us a lot more in the long run... Property management is such a huge key to success, so I would say that would be our biggest mistake.
Joe Fairless: Best ever way you like to give back?
Lauren Cranford: So I'm super passionate about babies and children. I'm actually the mom to a preemie baby, which he weighed one pound and thirteen ounces at first...
Joe Fairless: Wow.
Lauren Cranford: And he spent his first 94 days in an EQ. Yeah... So when we were back home, I spent a lot of time volunteering up at the hospital that he was born at, and spending time with the families, basically walking the walk that we had walked and came out okay... So just sharing our story and offering help to those families.
Once we moved to China, I spent a lot of time in the local orphanages, and with the [unintelligible 00:20:36.10] to check out what they do. We've given back there. And I think here, of lately, it's sharing my time and our knowledge and our story about real estate to those who are interested and maybe just getting started and wanna learn.
Joe Fairless: How can the best ever listeners get in touch with you?
Lauren Cranford: Yes, e-mail is the best way. Our e-mail address is CranfordPropertiesLLC@gmail.com.
Joe Fairless: Thank you, Lauren, for being on the show and talking to us about your investment evolution, the opportunities that you have as a result of living across the globe from where you're investing... One is you're up when most of us are asleep, so your e-mails are the first ones in the inboxes of the people you're sending them to. Two is you can be productive in both markets and get some sleep along the way, and then three is having a network of potential business partners and investors who want to invest where you're investing, but don't have the connections or perhaps the same level of familiarity with the markets that they're investing or they want to invest in.
Then how psychology played a huge role in taking you all from one property to eight properties in approximately two years. So thanks for being on the show... I hope you have a best ever day, and we'll talk to you soon.
Lauren Cranford: Thank you for having me, Joe. Thanks, Best Ever listeners.

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