Jose Santana immigrated to the U.S. from Cuba in the late 1960s, and his father quickly began buying up rental properties. Jose learned from his father, and when the time came, began creating his own portfolio of small multifamily and single-family rentals (SFRs).

In this month’s investor story, Jose tells us about flipping houses, buying foreclosures, and the mistake he made trusting a contractor with city permits. Pay close attention to the reasons Jose focuses on the single-family rental (SFR) market, as he focuses on exit strategies for this popular asset type.

Let’s get started, welcome to Jose Santana!

Tell us about your real estate background

We came from Cuba in 1968 and my parents started buying rental properties as soon as they saved some money. About 15 years after we arrived, my dad had enough income to quit working and lived off of his rental income. He always involved me in his business and taught me a lot about managing real estate.

At age 19, I purchased my first duplex after going to a weekend seminar hosted by the New Orleans Real Estate Investors Association. I have been buying and renting or flipping homes ever since at a rate of one every 1-2 years. Real estate was always a good investment for me and provided a safe secure income through career changes.

Last year due to the pandemic, I took early retirement from my job, and now I can focus more on my real estate. Since March 2020, I have purchased 2 additional rental properties and 3 flips.

I don’t think I will go back to work for anyone else. I have enough income coming in from 16 rentals and have enough savings to purchase most flips cash at this point.

What’s your investment strategy

I live in South Miami Dade county where the most prevalent homes for sale are single-family homes, so that is where most of my investments are. I have a couple of duplexes in New Orleans but even there, the most common investment properties are single-family homes. I prefer 3 bed 2 bath homes because they are the easiest to rent. They are also the easiest to sell quickly.

What’s been your best deal and favorite experience with real estate investing so far?

It’s hard to pick just one, I have had a lot of great experiences with real estate. My favorite was purchased during the summer of 2020 in the middle of the pandemic. I purchased it from an auction site as a foreclosure, almost sight unseen.

I did drive by it once. It was a 4 bedroom two-story house with a 2 car garage on a quarter of an acre lot in a nice neighborhood outside New Orleans in Slidell, LA. I purchased it for $199,000, worked on it for 18 days, spent about $35,000 on renovations. When then accepted an offer at $289,000 the same day we put it on the market.

It was my first flip in many years and it was a great experience so 30 days later, we purchased another and then another.

What’s the biggest mistake you’ve made and what did you learn from it?

The biggest mistake was trusting a real estate agent to help me pick a contractor. I purchased a nice historic home in a great neighborhood for $455,000 that needed to be converted from a duplex to a single-family home because, in that neighborhood, it was worth almost double as an SFR.

The contractor assured me that he could get the necessary permits and it was ok to start the job. Two months in, we still had no permit and we could not close in any walls, I had to scramble to find a way to get a permit and finish the job.

It has been 2 months dealing with the city. Now, I am finishing the home with my new contractor. The good news is that the market has continued to go up in value during this time, but that is never a sure thing.

What is the one thing you know now that you wish you knew when you started investing?

How much money it takes! I purchased my first house with no money down, in fact, I received a check for $16,000 at the closing. Although that sounds good, without the $12,000 that I had invested to fix it up so the bank would finance it, I could not have done it.

You don’t need enormous sums of money to get started, but It takes risking some of your own savings and investments to get started.

What’s your favorite book or podcast on real estate investing?

My favorite book for real estate investing has to be the first one I ever read, Nothing down by Robert G Allen. I have read many books on real estate investing but always go back to the concepts spelled out in Nothing down.

I also listen to the BiggerPockets podcasts and Best Deal Ever podcast by Deal Farm. It’s a great way to stay up to date on investing ideas, strategies, law changes, and new ways to invest in real estate.

What’s your favorite thing about Stessa?

I love Stessa! When I discovered Stessa, I had been trying to set up my QuickBooks to manage my real estate business. I think after 1 year, I knew less than when I began.

I wanted a way that I could manage my real estate without the need for accountants for day-to-day tracking. This was because most of the accountants I interviewed knew nothing about real estate investing.

From the beginning, I was able to import all my transactions and assign categories and properties to them. As Stessa has added capabilities, I have grown along with it. I can manage all my properties, leases, values, etc.

People always ask who manages my properties for me and I just show them my Stessa page and tell them how with just a few clicks I can stay up to date with all my accounting and operations of managing my properties in 3 states.

Before Stessa, my wife thought real estate was too complicated for her to ever manage, now she’s my project manager. In short, I love everything about Stessa! It allows me to run my real estate as a business.