Sherman and Hemstreet built a reputation as shrewd real estate investors long before their names trended online. By 2018, their combined strategies in flipping, renovating, and brokerage work had translated into impressive financial results.
Their 2018 net worth reflected disciplined deal sourcing, aggressive marketing, and meticulous cost controls. Below is a snapshot of how their business performed during that pivotal year.
| Metric | 2017 | 2018 | Change |
|---|---|---|---|
| Estimated Net Worth | $4.2 million | $6.8 million | +62% |
| Primary Revenue Streams | Flipping, wholesale deals | Flipping, rentals, brokerage | Diversification |
| Active Projects | 12 | 28 | Scale-up |
| Team Size | 6 | 14 | Hiring surge |
| Key Markets | Midwest focus | Southwest expansion | Geographic growth |
Sherman and Hemstreet 2018 Business Model
Acquisition and Flipping Strategy
In 2018, Sherman and Hemstreet focused on acquiring distressed properties at auction and through direct seller outreach. They specialized in quick turnarounds, completing renovations in under 90 days to maximize profit per deal.
Revenue Diversification
Beyond flipping, they launched a rental portfolio and a small brokerage arm. This move smoothed cash flow across seasons and reduced reliance on any single market condition.
Financial Highlights and Projections for 2018
Detailed financial tracking showed strong gross margins on each flip, with overhead tightly managed. Their spreadsheet model allowed them to forecast net worth growth with high confidence.
Projections aligned closely with actual results, validating their conservative underwriting and conservative repair budget assumptions. This discipline protected them when markets softened late in the year.
Marketing and Lead Generation in 2018
Digital Advertising and SEO
They scaled Facebook and Google Ads while investing in SEO around neighborhood guides and renovation tips. High-intent leads from these channels converted at a superior rate.
Networking and Partnerships
Strategic alliances with contractors, attorneys, and title companies generated off-market deals. In 2018, nearly half of their acquisitions came through these trusted referrals.
Operational Challenges and Solutions
Supply Chain and Contractor Coordination
Supply shortages and scheduling bottlenecks threatened timelines in mid-2018. They responded by building a preferred vendor network and offering pull-through incentives to keep crews on schedule.
Market Volatility Management
Rising interest rates and fluctuating material costs introduced uncertainty. They mitigated risk by locking in material prices early and focusing on value-add renovations with clear exit strategies.
Key Takeaways for Real Estate Investors
- Diversify revenue streams early to smooth seasonal dips.
- Standardize renovation processes to keep turn times under 90 days.
- Build a vetted network of contractors and partners before scaling.
- Track metrics monthly to catch margin compression quickly.
- Use conservative underwriting to withstand late-year market shifts.
FAQ
Reader questions
How did Sherman and Hemstreet calculate their 2018 net worth?
They summed liquid assets, real estate holdings at conservative market values, and business equipment, then subtracted outstanding debt and payables on a monthly basis.
What proportion of 2018 income came from rentals versus flips?
By late 2018, rentals contributed roughly 30% of total income, with the remainder driven by flips and brokerage fees as they scaled diversification.
Did their marketing budget grow in 2018?
Yes, they increased marketing spend by over 50% to support new markets and test higher-funnel channels while maintaining strong ROI on each dollar.
What was the biggest operational hurdle in 20 contractor delays in 2018?
Contractor bottlenecks during peak season slowed project completions, which they solved by expanding their preferred vendor roster and implementing performance bonuses.