Karen Petersen’s Success Story

As a part of our exclusive Real Estate Investor Success Stories series, we spotlight inspiring stories of the most successful real estate investors in the industry!

In today’s issue, we’re going to highlight the fascinating story of a highly successful Florida real estate investor — Mrs. Karen Petersen.

Karen is the Owner and Manager of Fern Cottage Holdings, which provides affordable and specialized housing to a wide variety of special needs populations in the state of Florida.

Karen’s impressive achievements:

• closes around 10-20 deals per month
• earns up to $500K-$10M of annual net profit
• is proficient in creative financing, BRRRR, long- and short-term rentals, and flipping
• has been in business for more than 20 years

Read Karen’s success story below to learn how she got to where she is today. We hope Karen’s story inspires you and serves as a stepping stone for your own real estate investing career.

My grandfather began investing in real estate in post-WWII England. He converted old Victorian homes into flats, and also built some new homes and apartments.

He then emigrated to Australia and built Seaside flats, as well as his own home, and a “parade of shops” (strip mall).

I always heard stories about what he did in England, and he’d take me by the shops and houses he’d built when we visited my grandparents in Australia.

I guess the bug was planted because I’ve been investing in the US since age 22, and I’ve always loved real estate!

I was 22. So, limited credit history due to my age and being female in an older male-dominated industry was a challenge, especially getting financing.

Perseverance was definitely key! Finding contractors who would listen to me, and not tell me to have my (then) husband call them was also an issue.

I never called several contractors ever again, and still won’t over 20 years later!

What helped you to overcome those challenges?

I’m tenacious (and a redhead named Karen!) LOL! I don’t take “no” as an acceptable ending. I am creative and don’t let challenges and difficulties get me down for too long. I just think of another solution and change course as necessary.

I think being adaptable, thicker-skinned, and innovative are keys to success and longevity in the industry. You can’t let it wear you down.

What was the most stressful challenge you had to overcome during your career?

I do a lot of my investing out of state. Finding contractors who aren’t going to scam me, or view me as an open checkbook, has been a big challenge both during and now post-COVID.

We bought several severely distressed mobile home parks during COVID, all out of state in two different market areas, with which we had no network.

I definitely failed to anticipate problems finding decent contractors, especially to work on significantly value-add properties.

We needed infrastructure repairs, home repairs, tenant changeovers, etc. Once we had management in place and had developed a network of contractors we could trust, things went quite well.

I now specialize in rent-to-own homes. Giving people an opportunity that they otherwise would likely not have—to become homeowners—is incredibly gratifying.

I am grateful that I am able to provide that and give families stability, and put them on a journey to be able to develop generational wealth.

Facebook groups! I have literally done millions of dollars of deals by networking with people on FB and responding to posts.

Building that network, where I now get off-market real estate leads “before the ink is dry”, is priceless.

Find more suggestions of the best real estate investor lead generation software reviewed by Real Estate Bees.

— Kimberly Anderson, Senior Creative Editor at Real Estate Bees

I don’t know if they’re real estate investment software tools, per se, but social media is huge for me.

Rentometer.com is invaluable, as are all the real estate platforms like Crexi, Zillow, Trulia, Realtor.com, Redfin, etc.

What software tools did you try using in your investing business but found them not useful?

I’ve stepped away from commercial real estate lately, so the annual plan for Crexi analytics isn’t of value at the moment; but that’s because I changed my business focus.

AirDNA wasn’t as valuable as I thought it would be. I found it a bit clunky to use, and in non-metro areas the data was a bit lacking.

We have a lender we use a lot. On one of our first deals with them, they ran full background checks on both my husband and I. We’re talking 100-page plus long background reports!

The lender called me one morning and said to me, “I know why you don’t want your husband on the loan”.

I was confused and mentioned it was because on a recourse loan, I don’t want both our credits encumbered, so usually all the loans are in my name, so his credit stays free for anything we want to do personally.

The lender said, “No, I’m sure you were concerned about his domestic violence history”. Meanwhile, I have the lender on speaker phone, and my husband is standing right next to me.

I don’t play poker for a reason. I wear my heart on my sleeve and my facial expressions never need any interpretation.

My husband said the look I shot him was priceless! My husband quickly chimed into the conversation and asked, “What domestic violence history?” because he has none!!!

It turned out that the person who does indeed have a domestic violence history has the same first name, same middle initial, and one letter difference in the spelling of his last name from my husband’s.

A couple of letters of explanation later and the file was resolved.

We never did find out if the background company actually corrected the error in the report, but we got the loan, and my husband still wasn’t on it, and it wasn’t because of a domestic violence incident!

You can never do too much research or learn too much. Network and get to know people doing what you want to do that are having success at it.

A lot of friends and family won’t understand what you’re doing and will have negative comments or caution against. Take that advice with some consideration, but don’t let it derail you.

Allow it to inform you, especially if you get negative feedback on a deal or a plan from other real estate investors. Weigh everything out. Play pros and cons or devil’s advocate.

Have a worst-case exit plan and never deviate from it where you could negatively amortize or cash flow.

Know your numbers, plan for the worst case, estimate high on expenses, and have plan A, plan B, plan C and a plan D (or more if you need them).

Learn how to analyze deals, so you can pull the trigger on the right ones and not have paralysis by analysis.

If you start small, you risk less, and can gain skills and confidence you need to tackle the big projects.

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