- Peter Lohmann left his engineering job in 2013 to found RL Property Management in Columbus, Ohio.
- Starting from 0 units, today Lohmann has expanded its portfolio to 500 units.
- He reveals his real estate investing strategy and shares two tips for new entrants.
- See more stories on the Insider business page…
In 2007, Peter Lohmann immediately fell into the subprime mortgage crisis.
Fortunately, the Ohio native immediately got a job as an engineer. Witnessing the brunt of the financial crisis and always being business-oriented, Lohmann and his longtime friend Adam Rich began reading books such as Rich Dad Poor Dad and The Millionaire Next Door.
“If you have an entrepreneurial mindset, these books will light a fire in your brain that cannot be extinguished if you understand what is possible,” Lohmann said in an interview. “And it really happened to both of us.”
He recalled: “Everything is fine with us, it makes sense, we buy an asset, we rent it out, the rent covers the mortgage, the value of the asset is growing. This is the path to wealth, this is the path to financial independence. … “
In 2008 the property the market was in chaos and property prices collapsed. It was then that Lohmann and Rich decided to invest all their savings in their first rental property – a single-family home near the Ohio State University campus.
“It was a great time to buy real estate, and I would like us to buy ten times as much,” he said.
While Lohmann and Rich had a unique opportunity to buy a property at a discounted price, get it fixed and refurbished, this is where the duo really worked.
“He and I were there at night and on weekends when we did our day jobs as engineers,” Lohmann recalls. “We packed this old truck he had with a bunch of tools, paint and supplies, and we ran into the grounds.”
Over the years, both business partners have seen both the value of their very first property and the rents they receive from it rise steadily. Today they have a portfolio of 10 units. An insider reviewed public records on the websites of auditors and treasurers in Franklin County, Ohio, to make sure his firm owns the property.
0 to 500 units
On the way, the duo turned from real estate investment to property management… At the time, Lohmann said the neighboring business seemed like an easy way to generate some regular income to help them supplement their rental income. Soon, customer calls began to arrive.
In 2013 Lohmann quit his job as an engineer to start RL Property Managementwhich started out as a one-man job in his apartment and has evolved into a full-service firm employing 15 people who today manage roughly 500 units.
The firm manages rentals, rent collection and services to real estate investors who own single-family rentals and small apartment buildings. It has grown organically and through continuous acquisitions such as purchase of Core Select Property Group last April, bringing the company’s portfolio to nearly 450 units from 310 units.
“We make it convenient for property owners so that they can focus on either their day-to-day work or the next deal,” he said, “without having to worry about tenant calls. with a service request “.
Lohmann said that the current booming housing market this is not good for property managers because clients often choose to sell, and as a result, they lose streams of income. On the other hand, many buyers looking to buy property amid the housing boom also end up hiring property managers to manage it.
Advice for novice real estate investors
Finding himself in the hot housing market, Lohmann decided to sell one of his apartments for the first time in June. A single-family house was purchased in 2012 and “has risen in price.”
Even in the seller’s market, Lohmann said he is leaning towards his investment philosophy of “holding on for a very long time” simply because inflation was raised and potentially persistent.
“I get calls every day from real estate investors, friends and colleagues, and they say that I have money, but I don’t know where to invest it,” he said. “Even if you could sell your property at a premium, but what’s next, now you’re stuck with all that money, and you’re essentially losing money to inflation.”
Knowing well enough that real estate creates wealth better than many asset classes, Lohmann recommends that aspiring investors step into this space (1). buy real estate in areas familiar to them, and 2) buy the most beautiful property in the best possible area…
He adds that investors should stick to their local neighborhoods, cities or states, especially when buying their first pair of properties. “No one knows these areas better than you, and no one will understand you better than the rent is likely to be,” he said.
It is also important to choose properties in safe areas with good schools and potentially high income residents.
“Especially when you’re just starting out, I’d rather own one duplex in a really beautiful neighborhood with a great school district than 10 single-family homes in a low-income neighborhood with high crime rates or bad schools,” he said. , “You will get a very low rating and it will be difficult for you to rent.”