Domenicos Kosteris has worked in the real estate sector for decades. In 1998, he began to invest in real estate on the south side of Chicago. After a couple of years, he started to branch out in his investing into the Northwest Indiana and the south suburbs of Chicago. Domenicos would enact a clever investment strategy method called BRRR. BRRR stands for Buy, Rehab, Rent, Refinance, Repeat. Basically, with this strategy, one buys the house outright and makes the necessary repairs. To purchase the house, Domenicos was using convenience checks from credit card companies. At that time, they were offering these checks at low introductory rates, figuring they would raise the rate later. Domenicos would obtain these checks but then pay them off before the rates could be raised, thus avoiding exorbitant interest rates. Domenicos would rehab the house and find a renter. After he found a renter, he would go to a bank and have the house refinanced. The bank would in effect pay back the creditors who financed this deal. Domenicos used this ingenious method of financing his property investments for years, and he still does this but uses his retirement funds instead of convenience checks. Over the years, Domenicos has formed a team consisting of a realtor, lawyer, plumber, electrician, painter, exterminator and lawn care. In recent years, he has also been purchasing houses by putting down the required 20% and investing strictly in single family houses because he finds them easier to manage. The tenants of single-family dwellings also tend to stay much longer than tenants in multi-unit buildings.
Over his decades in this business, Domenicos has learned many lessons and become an experienced entrepreneur in the real estate sector. He has become an expert on how to flip houses. He has also made the decision to sell some of his houses in the south suburbs because the property taxes rose too high over time. He developed significant relationships with his tenants, and he even offers them a finder’s fee if they can refer me a new tenant when there is a vacancy. In his free time, he loves spending time with his wife and their two sons. As a family, they enjoy exploring ethnic food options. His favorite is Ethiopian though he also appreciates Middle Eastern and Italian fare as well. Domenicos is a huge fan of mixed martial arts which is what spurred his interest in muay tai. He practices the sport himself, which is very physically challenging. At the end of the day, Domenicos is a man of integrity and devotion, who strives to leave the best example he can for his sons as well as the best possible impact on his community.
How did you get started in your industry?
One of my good friends started doing this. He was a night watchman at the local high school. He walked me through buying my first house and it was a very easy process, surprisingly so. My friend said, “just imagine if you did this 5 or 6 times”. I saw the potential for making substantial amounts of money if you were to keep repeating the process, so I decided to jump in.
How do you make money in your field?
I find properties that have the potential for profit. I purchase those properties and then put whatever work into them that needs to be put in. After they have been rehabbed and are ready to be rented, I will market them for tenancy. The money is made via the rent that is paid minus overhead.
How long did it take for you to become profitable?
I have kept most of my costs low and then used some unique strategies to further reduce things like interest paid for instance, like the strategy outlined above. Also, I don’t have other expenses like an office building or employees that work for me. Due to these things, I was able to have a profitable first year. I know that is not always the case for a business, but it can be done. My advice would be to look for ways to reduce overhead costs and use innovative investment strategies wherever possible to save on costs if you are looking to start your own company.
When you were starting out, was there ever a time you doubted it would work? If so, how did you handle that?
I think we all have doubts from time to time and I have known some investors that have mis-managed their properties in a large way that ended badly for them, but “a wise man learns from his mistakes”. I have made mistakes too, but they can be beautiful because you learn from them, or at least that is what you should do. From mistakes, are born moments of introspection. I have learned that this applies to parenting as well, probably even more so than business, it is essential to not only learn from your mistakes and grow from them as a parent but to also show that growth to your children. Show them that you are imperfect and that it is one hundred percent okay for them to be imperfect too. When your kids know that they are allowed to make mistakes around you, it will make your life easier as a parent, trust me on that one.
Do you remember how you got your first client?
It would have been through that friend that had introduced me to the industry. He got me started and got me connected with my first client too.
What is one marketing strategy (other than referrals) that you’re using that works really well to generate new business?
When you have rental properties, the properties themselves can do so much advertising for you. So, it is of the upmost importance to keep them in great running condition and also to keep the tenants happy. When the property looks like an advertisement every day to people driving by who may also see your name on the rental information, that will be so much more of a testament than any spoken word could be sometimes.
What is the toughest decision you’ve had to make in the last few months?
Whether or not to pay off debt or just continue to use the money to purchase more property. I went with the latter. I did the math, and it was more profitable because the market is going higher because I am getting a better return on investment. I needed to strike while the iron is still hot.
What do you think it is that makes you successful?
Being able to learn from my mistakes and listen to others that have been there. I also constantly educate myself through reading and also watching youtube and listening to podcasts.
What has been your most satisfying moment in business?
Looking back over the many properties I have improved, flipped, and maintained. Also, the many tenants I have met and helped through the years; it has all contributed to a feeling of satisfaction. Of course, nothing I have ever done in my professional life could ever come close to the satisfaction I feel when I look at my family. They are what I am especially proud of.
What does the future hold for your business? What are you most excited about?
I plan to continue in my efforts. I am always looking for the next, best decision to make. With the pandemic continuing on, it will be interesting to see how things continue to unfold so I will be keeping a close eye on market conditions and seeing what my next steps will be. My hobbies are honestly what excite me the most. I love spending time with my family and seeing what adventures I can get up to with them, looking for a new restaurant or type of food to try, or just finding a new activity to do together.
What business books have inspired you?
The Christian Entrepreneur: Dream, Plan, Execute, Grow by Brock Shinen and also The 7 Habits of Highly Effective People by Stephen Covey.
What advice would you give to your younger self?
I might tell myself that it is okay to not have all of the answers. Sometimes, especially once you become a father, you think you need to always have all of the answers and it can feel like a failure if you don’t have all of those answers. But here’s the thing, no one does! Not even the smartest guy in the room is going to know absolutely everything. Besides, figuring out the answers, getting to know new information on a daily basis, that is fun anyway. So, enjoy that ongoing education process and do not put undo pressure on yourself to have all of the answers. Likewise, don’t expect others to either.
Are you willing to be a mentor? If so, how should someone contact you?
I think I am probably too busy at this time to be a mentor. Managing properties is a 24/7 job!