Twin brothers who turned a single house into nearly $8 million of property share 9 tips for aspiring real estate investors (2024)

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Recognize that your investments are a business, and plan for it.

"If you're going to get into real estate, whether you like or not, it's going to be a business," Kelly explains. "If you buy even one property, it will take up part of your life, so you have to take it seriously and plan for the future."

In 2001, before buying their first place, the brothers decided that despite the fact that they didn't know much about the industry, they'd make a plan of action for the next few years, Kelly says. "We sat down with a spreadsheet and planned out the number of properties we wanted to buy in the timeframe. It was funny: Five or six years later, Chris found a printout of the spreadsheet in a real estate book in his office he'd been reading, and we were almost on the exact number of the properties we had planned to buy."

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Find someone who knows more than you do.

Whenthe brothersfirst started investing, they went to a local meeting in Raleigh to meet, and hopefully speak to, a local residential real estate investor whonow owns over 2,000units in the area. They invited him to dinner, and he accepted.

"Ultimately we went to work for him for two years and saw everything there is to know for what our area of real estate, from fires to new construction to tear downs," Chris says. "One of our favoritebooks is 'Rich Dad Poor Dad,' and he's that guy to us: the rich dad, if you will. If there's a problem, we still call him. That definitely hasbeen the most important thing contributing to our success."

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Invest for cash flow.

Before anything else, the Edwardses make sure the numbers work out.

"No matter what you read on the internet, our mentor told us one thing: Buy where the numbers work," Kelly explains. "You buy property for cash flow, not speculating 'This will appreciate 6% over the next 10 years.'"

When themarket tanked in 2008, the brothers' friends from banking would come by, asking if they were OK. "We told them as long as our cash flow is working, wecould care less what the market is doing," Kelly says. "Over thelong, long term we'll see that appreciation. If you're flipping homes, that's great, but to be a property manager you have to buy where the numbers work."

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Invest in your own knowledge.

Kelly and Chris are big readers, and recommend anyone take the time to gather industry knowledge before and while they start investing.

"There's so much information on the internet today," Kelly — who read books and spoke to experienced businesspeople instead of taking any official type of real estate class — says. "You're going tosee books, blogs, classes, gurus ... you need to start reading and learning. That goes back to taking it seriously. Ourbookshelves are filled with real estatebooks, from Trumpto Kiyosaki. We're big believers in reading."

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Get started.

That said, your research won't help you unless you decide to actually use it.

"We have a lot of peers and friends who come to us and say, 'I want to do this, will you sit down with us?'" Chris says. "We do it, and then a year later they call us back up and say they're still considering making an investment. Finally, we get to a point where we're like, 'When you're serious about it and need help, let us know.'"

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Find your niche.

Kelly explains that when you start out, you shouldn't try to be all things to all people. As he says, "the riches are in the niches."

Whenthe brothers noticed Raleigh making national lists of the best places in the US to live and work, they started buying property in areas they foresaw would appreciate.

Because they were so familiar with their local market, they were able to pinpoint these neighborhoods and create properties for new area residents. "We now own a big portfolio of rental properties that we classify as high-end rentals," Kelly says. "The average client pays $1,200 a month for 800 square feet. We found a real sweet spot with those millennial tenants."

High-end housing for millennials isn't the only niche the Edwardses have developed. On the other end of the spectrum, their company has gotten into affordable housing to diversify their interests. They turn properties into upscale rooming houses and have recently been contacted by local affiliates for low-end housing, who want to continue pursuing ways to offer comfortable, livable, affordable housing.

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Expect problems along the way.

"Ilike to say, 'If you're not having major problems, you're probably not doing something major,'" Kelly says. "It's a business,and you're going tohave problems with it from the time youbuy to the time you sell."

Don't expect to get rich quick.

"We always use the analogy of the tortoise and the hare," Kelly says. "Jump on the internet and it says get rich quick, everyone is wealthy. But it ain't that way — it's just not. The book is childish, but we have copiessitting on our office shelves remindingus of whywe do what we do. If you're just starting out, keep in mind that it's not a 'get rich overnight' plan. It's kind of a 'get rich slow.'"

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Keep your eye on the prize.

"One of thebiggest things you have tounderstand is that you have to keep your eye on the prize," Chris says. "It sounds cheesy, but there's truth in the idea that you get to design your own destiny. If you work hard enough and hang in there, you can have a lifestyle where you get to do what you want to do. It's not rocket science —anyone who canuse a calculator can do it."