Episode 193: Professional Failure with Justin Skinner
Growing up on a farm in the Midwest of the U.S., Justin Skinner had no intent or idea of becoming a real estate investor or author. In fact, he wanted to be a professional baseball player from the age of two, when his father gave him his first baseball. By the time he reached college, he realized that he wouldn’t be playing baseball after graduation, so he began to seek other avenues and jobs to figure out his life’s path. Through all the doors and opportunities of post-graduation jobs, he stumbled his way into real estate investment – negotiating his own real estate deal with a college friend in banking for an off-market commercial property.
Connections and Relationships Matter
Due to his connection from college, Justin was allowed access to creative financing for his first deal. Most people believe that going into a bank is just to crunch numbers, but it’s really about building a relationship. Luckily for Justin, he had a previous connection, so the relationship was already built, but that doesn’t mean you can’t walk into a bank today and start building a trusting relationship with a financier to help get you the best deal possible, whatever your endeavor may be.
Starting Real Estate with AirBNB
For Justin, he chose to utilize the growing popularity of short-term rentals via the renting giant, Airbnb. Justin buys and builds properties in vacation and high turnover locales and turns them into short-term rentals for various types of customers- the biggest being vacationers and traveling healthcare professionals.
Short-Term Is Not For Everyone’s Long-Term Goals
Like Justin, many people get into AirBNB with the intent of making it their entire business, but there’s a problem with this business model. If you’re intending to keep your business team small, en masse AirBNB ownership is going to be extremely limited. It is hard for a business owner to sustain multiple AirBNB properties without a team to match. Another issue with mass AirBNB ownership is local laws and neighborhoods that simply do not want a short-term rental property in their neighborhood. Laws are growing in every state to prevent over-saturation of short-term rental properties, and this can become an obstacle for those seeking to keep their AirBNB business to one locale.
Many travelers are tired of staying in characterless hotels, especially long-term, and long for the comforts of home. This is why many choose AirBNBs versus hotels on their journeys. This poses a tedious and expensive task for short-term rental owners: You are required to put significant money into furnishing the property and giving it the upper hand over traditional hotels through the feeling of “home”.
This is why Justin is choosing to pivot his business to buying and building properties for a traditional rental structure.
Pivoting into the Traditional
By taking his knowledge of short-term rentals, Justin is able to pivot into traditional rental ownership. By building new residential structures, Justin is able to put a low down payment, for example, $10k, finish it for $220k, with an appraisal of $300k, and come out with a positive of $60k+ in property equity.
He then uses this positive property equity to return it to his property, which means less money that needs to come out of his pocket to get the property prepared for renting.
Justin currently chooses to keep positive equity within his properties instead of pulling it out or refinancing because of the uncertainty of the future with market drops and dips. This is his protection from these potential market fluctuations so he is not left trying to hastily put equity back into his properties.
Slow and Steady
By rushing into trying to build a multi-million dollar real estate empire, it’s easy to get into debt. By managing your business growth at a slow and steady pace, your likelihood of failure is reduced. Becoming overzealous or lofty in your goals to make money – especially with the intent of quick money – you run the risk of a market dip tumbling your whole enterprise and falling into severe debt.
By making connections with seasoned real estate veterans, heeding their stories, looking at market trends, and doing the behind-the-scenes education, Justin is able to set up a comfortable standing for himself in the real estate business.
Certainly, Justin is no failure, but he has had failing moments. When getting into the business of real estate, Justin began listening to others’ success stories, in fact, that’s all he heard about: the success stories. Which was good to hear, but didn’t reflect his own experiences authentically,so he began journaling his thoughts and feelings about his experiences, successes and failures.
Justin began thinking about all the lessons he learned — especially from his failures — and how this mindset of failing can encompass a person. He began to believe that to get the whole picture, one needs to know about all sides, not just the success stories.
From these journaling and introspections was born his book, Professional Failure. Justin’s goal is to share the real experiences he’s had to help others not feel like a failure just because one single idea failed. He wants his readers to understand that fear of failure is real and valid, and how to navigate these feelings, while not allowing yourself to become consumed by fear or one bad experience. Justin believes that his learned experiences will help others to also push through their fears of failure to become the success stories he hears on podcasts and articles.
Professional Failure is the culmination of Justin’s belief that failure is not the end all be all, and that you cannot have the successful stories without the failures along the way.
Connect with Justin for more:
Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.
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