Presidents’ Circle member, missionary, real estate investor, and business owner Robert Knight has been purchasing and rehabbing buy-and-hold single-family rentals since 2009. In 2016 he pivoted to new construction in the sunshine state. He shared his real estate story and a few other fun facts with Think Realty, including business tips for beginners. Read on for Rob’s story:
“In 2015 my wife and I returned from 20 years overseas as missionaries and purchased a HomeVestors franchise. We rehabbed or wholesaled 17 properties our first year but noticed our marketing spend and the competition for distressed properties in our area was increasing. I chose to move our family to Cape Coral, Fla., because I was so impressed with the vision of the city as a pre-plotted, master-planned community with over 400 miles of gulf access and freshwater canals.
One of the unique things about Cape Coral is that it has 119 square miles and 50 percent of the city is still unbuilt with an almost endless supply of affordable lots. In 2016, with this idea in mind, we started White Stone Developments to begin building single–family homes and duplexes for investors and first– time home buyers.
Our long–term vision is to help investors take advantage of this amazing location and hold rental properties that have strong cashflow and potential for capital appreciation. Our preferred niche is new construction rentals and build to rent. We believe there is huge potential to create differentiation for investors. Below are a few reasons why:
- Location. Location. Location. Great locations perform better!
- Land prices are still historically low.
- Rental revenue is higher because it is quality new construction.
- Scalability/deal flow is endless for the foreseeable future.
- There are fewer expense surprises than in rehab deals.
I am excited by the multitude of opportunities all around me in this paradise called Cape Coral. Not many places can you get gorgeous waterfront canals for as low as $10,000! Investors can own rentals in an amazing area with solid cashflow, builder warranties, historically low interest rates and strong potential for capital appreciation. What concerns me is helping as many investors as possible get started before interest rates get higher.
What really fires me up is helping people move toward financial freedom with new construction rentals. Each new property goes to work for investors to give their family more freedom and options that make life amazing.”
What advice do you have for beginners in the real estate industry?
- Read books: Find the authors that have been successful in real estate and model the author’s philosophy and way of thinking. Change your thinking and you will change your life.
- Masterminds and real estate investment groups: Start building friendships with people already succeeding in real estate.
- Deal analysis: Start by learning how to analyze deals. The best way to get good at recognizing great deals is to look at a ton of deals including the really bad ones. I use www.rehabvaluator.com both for rehab deals and for new construction deals.
Do you have a guilty pleasure?
That would have to be a glass of chardonnay white wine, sashimi salmon, accompanied with some Pine Island clams and Gulf oysters.
How have you evolved as an investor?
I started off just chasing high cap rates and even held a few Section 8 rentals, but I have realized over the years that there are many other key factors that are not always apparent on the surface of the numbers. I prefer owning assets that are A and B class assets and in nice locations and don’t mind a slightly lower cap rate on the surface if I am able to own in great locations with strong tenants that take care of my property.
In response to the COVID-19 pandemic, how have you adapted in your business practices and in your investing choices?
Initially buyers were all hitting the pause button on new construction but as the economy opened back up buyers/investors have snapped right back with enthusiasm pointing to a V-shaped curve recovery.
I am still waiting to see a flood of distressed property hitting the market. The distressed deals I am currently seeing are mostly in C–class neighborhoods with cap rates below 10 percent. We are keeping our eyes open for deals but optimistic about our Cape Coral location and the affordability of new construction homes that investors can build for rent. For example, we can build new construction duplexes in nice, working–class neighborhoods at an eight percent cap rate.
What makes you laugh, no matter what mood you’re in?
Kevin Hart or Eddie Murphy
3 Favorite Books
- Cashflow Quadrant (Robert Kiyosaki)
- Zig Ziglar’s Leadership and Success Series
- Awaken the Giant Within (Tony Robbins)