Investor

This Army veteran and real estate investor shares his top tips

“I always knew that I wanted to go into business since I was very young” veteran and immovable says investor Andrew Davis. “I think a lot of kids like to do a lemonade stand “I had a real thrill when I was younger. So it was already in the back of my mind.”


Courtesy of Andrew Davis

Before going into business, Davis graduated as a Signals Officer from the United States Military Academy in West Point. He then served eight years in the military, five of them on active duty. But Davis knew he didn’t want to spend his entire career in the military.

So he started exploring other options. Davis had family members involved in the immovable business already, and after talking with them and doing more research, he decided to give it a shot. In 2014, he launched his new career at New Western, a private market for fixed and reversible residential solutions. Properties.

Davis began buying rental properties slowly, working at his new business part-time while still in the military. Then, when his active duty ended, he got his real estate license.

“I wanted to learn a bit more about the industry and be closer to the front lines of the action,” Davis says. “I graduated after just trying to buy and keep rental properties to repair and return properties, using the proceeds to purchase more properties.”

Entrepreneur sat with Davis before veterans day to discuss how his time in the military helped prepare him for a successful career in and what potential investors should always keep in mind, regardless of market developments.

Related: 6 Ways Small Business Owners Can Celebrate Veterans Day

“When you study the art of war, you break down wars at a strategic, operational, and tactical level. And you can do the same in business.”

By the time Davis left the military, he felt confident in his ability to move forward with a full-time career in property investment. Much of what he learned at West Point and beyond was applicable to his new venture, he says.

A particularly useful course at the Academy was called “The Art of Military Warfare”.

“It’s the best business class I’ve ever had,” Davis says, “because the funniest thing is when you study the art of warfare, you break down wars at a strategic, operational level and tactics. And you can do the same thing in business – how you run your business strategically, operationally.”

Additionally, Davis’ time in the military taught him how to lead and effectively manage an organization.

“It helped me wire my engine efficiently,” says Davis, “and I attribute a lot of success [to that].”

Another critical skill Davis honed in the military? The adaptability and plan accordingly.

Real estate is always fluid, Davis notes, which means you need to assess a situation or obstacle as it arises — and react in a timely manner.

The impact of Covid on real estate is a perfect example. Although the market has quickly warmed up, it is since cooledrewarding investors who have continued to rely on sound business principles.

“It’s important to learn the fundamentals of business early on so that no matter what the market does, you have a business plan that you can modify and adapt. [suit] what’s happening now,” says Davis. “Stick to the fundamentals of goes a long way, although there is a lot of talk about raising interest rates.”

Related: How millionaire entrepreneurs prepare for a recession

“The principles remain the same no matter what.”

What does maintaining these business fundamentals look like in practice?

“The principles stay the same no matter what,” says Davis, “buy quality properties, buy with a built-in profit margin. Things like that keep my business going no matter what. And then a lot of hard work also – being persistent and working hard is very helpful, especially during the most difficult times.”

Early in his career in real estate investing, Davis prioritized buying and owning rental properties. He says that owning rentals comes with some stability, because you’re essentially guaranteed a monthly residual income. Typically these properties will be rented out, he explains – it’s just a matter of how much and what makes sense in the end.

For those who are at the start of their property investment career, Davis recommends “cutting your teeth” on easy projects, like a cosmetic renovation for rent, before exploring what may be more complex and risky fixed and reversible properties.

Once you’ve purchased a property to flip and attached that “value added component” to it, you’re counting on it being worth more when it’s finished. But that assumes the market stays consistent, doing what it did in 2021 in 2022, for example. Of course, this is not always the case.

“There’s room for things to go wrong when you’re peeling the onion on a property,” Davis says. “Maybe you discover things you didn’t originally expect. Maybe the project is taking longer. Maybe the supply chains are messed up. [fix-and-flip] can be a profitable business, there are more risks associated with this business model, in my opinion.”

Related: How to Find Funding to Start a House Flipping Business

“There’s a steep learning curve and a lot of people have a negative experience at first.”

Whether you want to buy to rent or buy to return, Davis suggests keeping a few important things in mind.

For those young investors just getting started, Davis recommends slowing down the process.

“I see a lot of people getting aggressive early on,” he says, “and maybe they’re not as well-established with the process of real estate or real estate investing. And in the real estate, there are always walls, and it is up to this individual [if they’re going] hit a wall at a million miles an hour or at ease [into it]bump into a wall and be able to bounce back.”

Davis also cautions against believing what you see on many TV shows that make correcting and turning “seem like a walk in the park.”

“There’s a steep learning curve, and a lot of people have a negative experience at first because most pinball machines cut their teeth on a bad project,” he explains. “A lot of seasoned investors I know are people who just went through the process and were persistent: when there was a lesson to be learnedthey learned it and then applied it to the next project.”

Additionally, Davis suggests having several things going on. That way, if one domain slows down, another component can help catch up.

“So, for example, I started a property management company in 2020,” says Davis. “It was really difficult to find the same amount of set and return opportunities, although not impossible. Property management activity has been concentrated as some of my investments have slowed. As the real estate market slows, this could be a good buying opportunity. So things are definitely changing inside and out.”

Those willing to forge their way into real estate, applying what they’ve learned along the way and possibly taking on multiple projects at once, are in a position to build a lucrative business.

“As far as real investments go, I only own real estate,” Davis says. “It’s a timeless business. If you dissect a lot of investing, it comes down to supply, demand, and ability to pay. I’m a big fan of consumer staples, things like groceries and real estate. There is always a demand for shelter or usable space. And many of these structures will last for generations – so it’s a great place to park some cash.