JAKE & MEGAN COWLEY

Investor SEP 2020 ISSUE NO. 1 $PRICELESS JAKE & MEGAN COWLEY TALKS ABOUT TAKING ON SMART RISKS

EXCLUSIVE Jake is a Senior Underwriter, Real estate investor from Chattanooga, WHO IS... Tennessee. He’s been married for 9 JAKE years, and a father, blessed with two & MEGAN beautiful girls (that keeps him pretty COWLEY active).   Lifetime Business Partners With his wife, Megan, his lifetime business partner, they are investing in real estate, self-managing acquired properties, while currently employed in their W2 jobs.  If not working, they are outdoors, hiking, boating, swimming, taking on new adventures, and exploring-- spending quality time with their family.

HOW IT ALL STARTED DURING TIME Jake started in real estate last year when he WORKING joined an event through a company about FROM HOME leadership. With over a thousand applicants all over the United States, he was one of the By Sterling White 29 individuals finely selected. The main Photo courtesy of objective is coaching and helping others @jmcproperties2020 achieve their goals. He completed the program last year. During his time working from home, he finds time to study and came across Youtube Biggerpockets video featuring Sterling White “From Zero To 400 Units in 3.5 Years” and became intrigued about what REI can offer. He started reading books, listening to podcasts and that started his real estate journey.

GOALS During a car ride, they were listening to a husband and wife podcast talking about 25 setting a time to set goals as partners. UNITS IN 10 Jake is a high-level thinker and strategist. YEARS His wife, Megan, is super detail-oriented, she's an expert in setting systems and Husband and wife talks processes, and accountability. These things that he does not enjoy much doing (weaknesses that his wife complemented) help them in their business, managing properties, reaching out to tenants, vendors, etc.   He is a firm believer that writing down his goals, crafts mindset, and focus. He said that “Mindset is the main driver that determines the outcome”.  They are looking for 25 units in 10 years. Considering having 2 young girls, graduation, studies, and all the moving parts. Taking the approach of aggressive but smart investing.

MINDSET IS THE MAIN DRIVER THAT DETERMINES THE OUTCOME -JAKE & MEGAN COWLEY

WHY HE CAME TO US INNER CIRCLE “I found Sterling’s Youtube video interview “From Zero To 400 Units in 3.5 Years” on BiggerPockets, started following him, he’s posting great content! On a personal level, he posted a video about showing his daughter riding a bike. I reached out to him and it was one of the connections we had. He is where I want to be.”, Jake said. “And you can tell he is a great dad.”  “Surround yourself with like-minded people, that’s why I joined Sterling White’s Inner Circle, there’s a community that’s working on the same goals. As a new investor, that helps a lot! Connecting with local investors too, learning from their experiences. In real estate, there are people here who would just want to help you, which is really awesome. It helps limit potential mistakes and mitigate risks.” Jake added.

@jmcproperties2020 How do you know when to walk away?  We had this property under contract at the same time as the duplex. Currently, it is tenant occupied with a month to month lease paying slightly below market value. It currently cash flows at $148/month and 8.23% COC ROI. It didn't exactly meet our purchase criteria which is $200 cash flow per month and 12% COC ROI for a SFH but there was an opportunity to increase rent about $50 dollars and potentially re-sign the tenant on a 1 year lease. We loved the potential because the property would appreciate approx. 5-7% each year over the next few years because of all the work going into revitalizing the area. However, we ultimately ended up terminating the contract because of the following reasons: Repair Costs:•From a recent inspection report, we found that there were several repairs that needed to be completed fairly quickly: full roof foundation, plumbing, and termite damage issues• Based on all the repairs that needed to be made, we wouldn’t break even on this property for several years. Slow responses from the listing agent/seller. During our due diligence process, we asked for several items and unfortunately, the listing agent would only provide partial information or just not respond to our requests. It got to the point near the end of our due diligence period that our agent literally set an hourly timer on her phone to text/call the listing agent for missing information. Our concerns here were what other potential issues may come up because we weren’t getting all the information we needed had we decided to just move forward and close the deal.At the end of the day, one of the biggest challenges to growing your business is knowing when to walk away. As new investors, we want to grow our portfolio quickly but we need to do it the right way. The feeling we got was to just walk away because the risks here outweigh the potential rewards. Hopefully, we made the right decision. We wanted to make sure we’re taking on smart risks. HURDLES MAJOR PROBLEMS “A few months ago, we were under contract with 2 properties- duplex and single-family. We knew that would tie up our reserves. Figured out later that there were roof replacement, termite damage, foundation issues, plumbing issues. Items that needed immediate attention which will drain our reserves. We got a family to take care of and so we wanted to make sure we’re taking on smart risks.”

EXPEDITION OF EXPERIENCE. SOLUTIONS “FAILURES ARE JUST A LACK CHALLENGES ARE OPPORTUNITIES.\" Take on new challenges extend your growth and allows you to take on a brand new mindset. We do things that help us grow. Knowing the potential areas, development opportunities, and connecting with people doing what you want to do. Connected with Sterling White and joined Inner Circle (which has been awesome, surrounding self with other real estate investors. Participated in Biggerpockets forums, and blogs, are also very helpful.” “At some point, you have to make a decision-- Are you just gonna sit down and wait, with all the learnings you got?”   Jake and Megan preferred to take action and learn along the way. They knew their gonna make mistakes along with their journey. As an underwriter, Jake is fully aware of the risks, and taking the right risk is okay. It’s part of success. Just have to weigh in, and identify the right risk, or at least mitigate the risks. It’s a mindset shift. Jake said,” It’s not a failure but a learning opportunity.”

STRATEGIES THAT HELPED JAKE & MEGAN “Accountability and weekly coaching calls have been super helpful and insightful on how we scale our business right. This helped us stay focus on our goals and keep us on track.”  “Also taking smart risks, knowing your limits, learning yourself strengths and weaknesses, your purchase criteria, and how much you can tap into, not over-leveraging.”  “Figuring out our purchase strategy. There are tons out there, single-family, commercial, flipping, etc. For us, we learned and decided that buy and hold is the way to go.”  “Key things, finding our core team. Now we have an agent working with us and we’re leveraging on her network connections, trade contractors, lenders, etc.” Don't pass on a good deal if it doesn't fit with your \"box\" KEY TAKEAWAYS \"Don't pass on a good deal if it doesn't fit with your \"box\". \"We wanted a 30 yr mortgage but couldn't get one because of the unpaid medical bill so we got a 5 year ARM as a temporary solution to get the property because it was a good deal even those the financing terms were not ideal.\"

@jmcproperties2020 We did it!!Jake’s key take-a-ways from closing on our 1st  property:  Find a Rockstar agent:This is our 2nd  time working with  @jennjoneskwagent  and her team. She helped us find our forever home and now she’s helped us find our 1st  rental. She’s a ROCKSTAR! She’s focused and dedicated to helping you solve problems and finding a solution that meets your needs. She’s also a tough negotiator because she wants the best for her clients which makes her a great fit for anyone. Would highly recommend her to anyone if you are interested in buying or selling.Find a small community bank:We heard from several investors both locally and through the BP community that we should really look hard to find a great community bank because often times they can find creative solutions where bigger national banks may just want to stick with what's comfortable for them because they get much more volume.Get your Spouse/Partner to share in your vision:My wife Meg (2nd photo) is the most supportive person that I know. For years, she’s heard me talk and explore side hustle business ideas and each idea she has been fully supportive and helps me get started. This time is no different. Not only is she supportive of my investor goals BUT she is also my business partner. She will be the point person for our business in managing our rentals and working with vendors to complete projects. I’m so excited that she is partnering with me on this adventure because my weaknesses are her strengths and in life that’s what we look for. @megancowley11 I’m so excited to start this adventure with you. Thanks for always believing in me! SUCCESS STORY \"Acquired a duplex, accounted for current and future expenses (CAPEX, vacancy, etc.), cash flow at $425 per month, 24% cash on cash ROI.  That property we bought, is gonna appreciate pretty well based on the market. It was kinda scary from the underwriting stand point, but with the advice of other investors, we took that risk and take action and we’ll figure it out. We plan to refinance in the next 2-3 years.”

JAKE’S ADVICE Best Investment  “Books. Best value. We bought 6 books for $80, about real estate, business, and mindset. If you set your focus, take daily action, you’re gonna reach it.”   Know Your Why “It doesn’t have to be real estate. It could be personal or financial freedom. For me, I’d like to show my girls the freedom of earning through their own business not through working for somebody else (especially during trying times like this pandemic). Teaching girls on how to do that, creating multiple streams of income, and diversifying income.”

WHAT WE’VE LEARNED MAKING “It’s easy to get plugged down by THE data. We felt pretty comfortable JUMP listening to podcasts, learning from books, etc.. It’s easy to get analysis paralysis. If you wait, it’s just gonna take longer to see the results. Really happy to where we are at right now.”

IF YOU WAIT, IT’S JUST GONNA TAKE LONGER TO SEE THE RESULTS -JAKE & MEGAN COWLEY

NOTES FROM STERLING Sterling White Enterprises One of the priceless things I enjoy most when working with real estate investors, either getting started and/ or looking to scale up is getting to see the backend of everything that is working.  Their goals and aspirations, trials and tribulations, strengths, and weaknesses. Speaking the same language- real estate. Our weekly coaching calls. Tips and strategies. Staying connected. Walking them through by the hand. Every single day working with the community more feels like a family. We decided to document some of the takeaways and share with you the real deal of our journey together. Within our community, there’s a channel we call #wins where we share our success stories and progress.We’ll be going through pretty much any member that will let us share some of the takeaways from working with them Jake and I are both a father to our daughters. Who wish nothing but the best of what they deserve. For us, real estate can be like riding a bicycle which requires balance, practicing and commitment to take action.