In 2004, Liz Faircloth and her husband, Matt, bought their first investment property — a dilapidated duplex outside Philadelphia. Since then, they’ve grown their business, The DeRosa Group, to about 1,500 units they control and manage in partnership with investors.
Along the way, Faircloth sought opportunities to connect with other investors, including Andresa Guidelli, who became a friend and partner on deals. They formed a mastermind group with four other women investors.
When they went to industry events and conferences, “so many were so male-dominated,” Faircloth says. So she and Guidelli launched a network designed to help other women find similar support — The Real Estate InvestHER — a community with 17,000 members attending more than 50 Meetup groups across North America. They host a podcast, virtual and in-person events and a 11,000-member Facebook group.
“We wanted to create an environment that would be a safe space for women, where we’d have each other’s backs,” she says. “When the contractor takes your money or a deal falls through, you have other women to support you and cheer you on, versus telling you, ‘You should’ve known that.’”
Faircloth spoke with Story by J.P. Morgan about her investing journey and lessons she’s learned along the way.
A: Initially we focused on dilapidated properties that needed a lot of work in Trenton, New Jersey. It was cheaper than other areas, and we thought it would be great to create an impact, taking dilapidated properties and creating livable spaces for people.
At first my husband and I bought things with friends and family, just piecing money together. Then you get to the point where you plateau. We started looking at working with investors, and if you’re raising money, you need to get certain returns. The Northeast is tough. More people are leaving the state of New Jersey than coming in. That’s how we evolved to looking at other states and larger multifamily deals involving 100 or more units.
A: If someone brings us a deal, the biggest question for us is: Does it meet our deal criteria? For us, the deal criteria has to do with the asset class, the size and the type of market it’s in.
What’s a good deal to you is different to me, and vice versa. It’s so easy when you start and you’re scaling to take whatever you can get, especially in this market, because it’s very competitive. We often make excuses, or say we can compromise on this or make this work, but people are overpaying.
People need to get clear on their deal criteria and then the brokers and people looking for deals can help you, because you’re specific.
A: We did, and we should have worked with more mentors along the way. I think that’s part of why Andresa and I are so passionate about what we’re doing with InvestHER. We’re creating things we wish we had.
I think scaling up took a long time for me and my husband because we tried to figure it out ourselves. It wasn’t like we’re the smartest or fastest or had the most money; we just didn’t give up. So over time, we made it. But I did have a couple mentors early on, and then we started working with Joe Fairless (co-founder of Ashcroft Capital and creator of the Best Real Estate Investing Advice Ever podcast) when we decided to move beyond New Jersey and start investing in larger multifamily properties. It really propelled our thinking toward underwriting bigger deals, and he was a great mentor.
Even now I’m part of a couple different coaching programs where I get support. I should have done more of that earlier on.
“It wasn’t like we’re the smartest or fastest or had the most money; we just didn’t give up. So over time, we made it.”
A: My favorite thing about what we’re doing on the active real estate investing side is creating alternative investments for people who might be tired of the stock market and want to invest in a large syndication of an apartment complex. It’s creating wealth for us and it’s creating wealth for them.
On the InvestHER side, I love to see women getting the support they need and making the decision to buy this duplex or fourplex. We had a woman who posted in our Facebook community that she was about to lose a deal on a fourplex because the lender was dragging their feet and the seller was frustrated. Someone personally knew the lender and got involved, and it all worked out for the investor because of the community.
A: I feel like women go deeper, quicker. There’s more transparency. They also tend to feel very safe with each other. There is another camp of people that says women can be more cutthroat to each other, especially in the corporate world, but I never had that experience. I always saw women supporting other women very naturally and easily. There’s less ego involved. There’s less sizing people up and more “How can I help you?”
A: Our first flip was a dilapidated property in New Jersey. We had someone helping us and he said it was going to need a new roof. We proceeded to get a new roof for this house and a week later, a structural engineer comes through and said, “You have to tear this house down.”
We had to tear down a house we had literally just put a $10,000 roof on. You could chalk that up to being green in the business, not having the right mentor, and moving too quickly. We ended up losing $30,000 on that property. That was a tough lesson, but you learn from it and don’t make that same mistake again.
A: I keep an eye on daily news at Bloomberg. I also like to follow peers and thought leaders. Two who pop into my head are Anna Kelly (an investor and syndicator, speaker and coach at ReiMom), and J Scott (an investor, author and co-host of the BiggerPockets Business podcast). Whenever they have a Facebook post and share something about the economy, I read it, because they’re usually right and give me another perspective.
Real estate is super local; it’s important to stay in tune with what’s happening in your community or the community you want to invest in. Are there jobs coming in? Are people moving there, or are they moving away? Anything that could affect the local economy or our particular asset class, I’m attuned to.
A: Grow a team faster. Sometimes when you’re a hard worker you try to do everything yourself, and you end up being pretty good at it. But you don’t want to be pretty good at stuff, you want to be excellent, and then surround yourself with other people who are also excellent.
I was too concerned about the money to bring on people sooner. We didn’t have the money, but we could have gotten creative. Once we started to build our team, our business started to grow and accelerate.