Getting going
A guide to real estate investment from a practitioner
Investing in real estate, whether buying a house for yourself or taking a fixer-upper and selling it someone else, is often cited as a way to build wealth. But for those with little knowledge of how real estate investing works or how to become a “house-flipper,” it can be a daunting challenge.
Jessica Rowell, one of the three owners of Evolutions Enterprises, discusses how they got started, tips for beginners and potential pitfalls to watch out for.
Rowell and her fiancé, Rae Mckinney, met their business partner, Hui Lin, several years ago over a mutual interest in real estate investing.
The interview has been edited for clarity and length. How did you get started in real estate investing? When I became a homeowner, I just got very excited about what you could do to improve your home. I think that coupled with my partner’s background in real estate, we just decided that you know this was probably something we could easily do once you saw that other people were doing it.
One thing we’ve always wanted to do with this work is inspire other people and make real estate investing accessible to anyone, because that’s our story. So, we started early on offering a session for folks to get together and talk about our different projects, learn from each other, share resources, etc. We sat down with some of the greats in the region who are real estate development brokers, contractors, anyone we could sit with and hear their story. By January 2020 we launched Evolution Enterprises. We have a portfolio of seven properties, two of which are in the process of being flipped. (The company is renovating three other properties with plans to rent them, two other properties will be used as Airbnbs.)
You and Hui, your business partner, are women of color, not the traditional face of a real estate business. How has that affected how you do business?
We’re very intentional about the image of our business really reflecting women and other folks who aren’t readily associated with real estate investment. We think it communicates something different to potential sell
ers.
But we hope that it’s also inspiring other people to dip a toe and not be afraid, and know that there is space here for anyone and everyone and we’re certainly holding that space for other people to join us in this.
We’ve had people who just ... it’s as if they’re seeing an accident you know, just double, triple-take that there’s all these, honestly, brown people or women working on this house and bringing it to life. You know, you might see that in someone’s crew, but you don’t
necessarily see the folks who are running the show who look like that. We’ve had people just stop us and be like ‘Sisters, how did you do this,’ and Rae is great. He’ll talk to someone for an hour just to say, ‘This is why we did it, or if you’re looking to get started.’ It’s been a really interesting experience to be really embraced by the specific neighborhoods and communities that we’re in. I think it’s refreshing for people to see that, you know, even though the ownership may change hands, it’s not necessarily going outside the community in that sense.
What is your business model?
So, one thing we do on top of buying our own properties, is we find folks who want to sell property through the investor side of things versus conventional real estate transactions with an agent and a broker. They’re generally very quick transactions, usually cash buyers. Some of them fit our parameters and meet our needs, so we’ll look to buy them. Others don’t, so that’s when we look to present them to our list of buyers. And that is wholesaling. That’s the other aspect of we do.
We work with people on a lot of different levels. We work with some very, very experienced investors who have huge portfolios and are just looking to add to that, we work with first-time investors. And then we work with a lot of other wholesalers.
What is wholesaling?
In New York state, you are able to enter into a contract for sale of a property, so we can enter in to one with a seller. And then we are able to assign the rights of that contract to another buyer. And in doing that, we do collect a small fee.
The fee always depends on what we call the spread of the deal. We look for opportunities where we can buy low and where we know there’s a lot of room for an investor to add value. And so that we’re able to a present something that’s really juicy to another investor but where there’s also room for us to fit in a fee for ourselves. Because we’re doing the marketing for the property. We’re building the relationship with the buyer, we’re getting the contract going. And then we’re stewarding that whole process so there is definitely a lot of work involved in that.
You also host online discussions on real estate investing. How does that work?
We bring in a speaker for a short amount of time. And then we open the floor up for questions and networking, people share their deals. We talk a little bit about projects we’re working on to give people some insight. What we’ve added to that is we’re now doing one on one coaching with folks. That is fee based. We’re coaching them and stewarding them through their first deal.