Personal Development

Justin Schnettler: Using BiggerPockets to Acquire Over $10 Million in Real Estate in Under 2 Years

Expertise: Real Estate Marketing, Personal Development, Real Estate News & Commentary, Mortgages & Creative Financing, Real Estate Investing Basics, Landlording & Rental Properties, Flipping Houses, Personal Finance, Business Management
301 Articles Written
Justin Schnettler

Not many people can say that within two years of starting their real estate investing careers that they built a portfolio of property worth over 8 figures, but Justin Schnettler can. This one time engineer has become an incredibly successful investor and his story is one that we will share with you in this interview. His success story is especially interesting to me because, according to Justin, BiggerPockets has played an instrumental rule in helping him make his growing fortune.

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Take us back to when you got started in real estate. What were you doing for a living and what inspired you to start investing?

For the last ten years I worked in the defense industry as an engineer and program manager. I worked in the propulsion engineering department as a ordnance, propulsion, and pneumatics engineer. I went the management route vs. the technical route and ended up as a program/project manager. I’ve always been interested in real estate but I decided two years ago to make a move to full time, and last August I quit my job and have been doing RE full time.

Why real estate?

It was what I was most comfortable doing. My father is a carpenter and I worked for him ever since I could hold a hammer. I can’t build my own house, but I know enough to know quality work when I see it. So, RE was just a natural fit for me.

Once you made that decision to take up real estate, what came next? Did you know how to begin? Walk us through that process of determining how to proceed.

What came first for me was joining the local REIA. I attended some of the classes they teach, did some homework, etc. I also downloaded lots of podcasts from various RE instructors across the country. Most of them try to sell you stuff but you do get some nuggets of good information. I had bought two home study courses but never really used them, but they did help me learn the “real estate language”; I’ve [also]probably read between 10-20 RE books. I ended up focusing on short sales because you could borrow 100% of the funds and they are so abundant in AZ. I had no money at the time, so it was a good approach for me. After joining BiggerPockets, I met Nick Johnson who mentored me on short sales. I completed 3 deals with Nick and 4 on my own. The last two years though, is where I really put my effort. I was working a day job and learning as much about RE as I could. It was very long weeks for 2 years but worth it in the end.

How did those first deals go? How did you and Nick end up connecting, and how did this mentor relationship evolve?

The first few deals had their bumps, but they eventually closed. The hardest part was probably the rejection and the anticipation of closing the first deal. It took me nearly 8-10 months. After spinning my wheels for so long, I met Nick on BP. He offer to mentor me and we’ve closed 3 deals together. He also introduced me to other people that I still network with today. During those times, Nick and I emailed non-stop but he never gave up on me, even when I lost a few deals. We ended up splitting some great deals. He really helped me through the tough times of rejection and losing deals. He kept me pointed in the right direction.

How did you end up on BiggerPockets? Other than meeting Nick, how has the site been helpful to you? Have you done other deals as a result of it?

I ended up on BP looking for a hard money lender. To be honest, I’m not sure why I needed it at the time, probably just building my network. The site has been extremely helpful to me, I have done some sort of business with at least five other members. Its great source to find answers but its also a great source to find business partners.

Wow, you did deals with 5 other BiggerPockets members . . . that’s great! How did you end up meeting them?

I ended up meeting most of them by simply participating and being active on BP. I try to be positive and professional on my posts because I know business relationships can be built on BP. There is always someone watching asking, “Do I want to do business with this person?” So I’ve tried to keep that in mind while posting on BP. As a result, I’ve made some great relationships and network with a quite a few people outside of the forum. In short, most of the relationships happened organically.

Since then, I understand that you’ve linked up with another member and have partnered up. Can you tell us a little about that?

Yes, Vikram and I have partnered up. We started buying properties together about a year ago. We took it slow at the beginning but then ramped up and have acquired 8 figures in properties together and have made a very profitable relationship. We really created a win-win relationship which is very hard to do these days. Our partnership has allowed to me quit my job and become a full time real estate investor. We are really looking forward to 2011 and have geared up our team to take on more houses in Phoenix and expand to others states as well. We both work very hard at our business and our blend of personalities have made us a strong team.

Acquiring over $10,000,000 in real estate in about a year is pretty incredible for someone who has only been doing this for two years. It sounds like you two have created a very successful partnership. How are you guys working together? What different roles are you playing? What is it that makes you two such a good team?

At the beginning our roles were somewhat undefined and we collaborated on most things. Over time we have naturally evolved; I handle short terms aspects of the business and Vikram focuses on long term goals. We are both very good at finding competitive advantages and exploiting them. We are a good team because our strengths and weaknesses compliment each other. What I am weak in, Vikram is very good at and vice versa. We challenge each other and do not always agree, which is what you want in a relationship. If someone always agreed with you, then there is no reason to ask them questions. We both also have a very good sense of humor which is more important than people think; we can laugh at the mistakes we make (at first we were not laughing), learn from them and implement processes so we do not repeat them. Believe me, we made a lot of mistakes at the beginning, but we both had vision and passion to build this business. Lastly, we are both very trustworthy. We had a written agreement on our first deal but after that we have done everything based on a handshake and good faith. We are now formal partners in an LLC but that was only recent, when we decided to expand nationwide.

What were some of those early mistakes and what did you learn from them?

The early mistakes were not properly budgeting for rehab and holding costs. Paying too much for materials and labor, etc. We should have hired an interior designer immediately for our rehabs. We were not familiar enough with the neighborhood or price point to accurately estimate the amount of rehab we needed. Also, comping properties correctly is harder than some people think. We bought and rehabbed wrong, but we learned it from, built our team, and now we are very successful at it.

Where do you see your business going over the next 6 months? Year? Care to share more about your plans?

I see us expanding to other states and setting up rehab teams there. Ideally, we would like to be in 2-3 states in 6 months and 5-6 states by the end of this year. We have been talking with other BP members about this opportunity and have a few great candidates lined up. We have already set up our local team and are looking to hand over the reigns so we can focus on expanding nationwide. Vikram and I are both really excited about this and we are looking forward to providing as many opportunities to BP members as we can.

I’m excited to hear how it progresses for you guys. Ultimately, how would you say that BiggerPockets has helped you and your business?

BiggerPockets helped me tremendously. I found my mentor, who got me over the “1st deal”, and then I met my current business partner, whom I’ve been doing business with for over a year. I’ve borrowed money from BP members, I’ve done deals with BP members, I’ve hired short sales negotiators from BP. Its truly a remarkable place. You can ask any real estate question and most of the time it is answered within 24 hours by several long time professionals. It is such a valuable tool that if you are not using it, then you are at a disadvantage.

Justin can be contacted via his company, Chari Capital Arizona, LLC, his profile on BiggerPockets, or by email at [email protected].

NOTE: Attached images are of rehabs that Justin has completed.

Joshua Dorkin is a serial entrepreneur, investor, podcaster, publisher, educator, and co-author of How to Invest in Real Estate. He started BiggerPockets to help democratize the real estate investing landscape for himself and others, aiming to make it accessible for everyone, regardless of income or education. Today, BiggerPockets is the premier real estate investing website online with over one million members and reaching over 70 million people with the message of financial freedom through real estate investing. Joshua, along with his wife and three daughters, make their home in Denver, Colorado, and spend any time they can traveling, exploring, and adventuring. Read more about Joshua’s story in 5280 and Inc.com.

    Dennis Fassett
    Replied almost 9 years ago
    This is a great story! Thanks for sharing it. It’s always nice to read good news amongst the doom and gloom. Dennis Fassett
    Justin Schnettler
    Replied almost 9 years ago
    Hi Dennis, yes once you wade through the doom and gloom there is opportunity. Thanks for the reading the article and your reply.
    John Fedro
    Replied almost 9 years ago
    Great success story Justin! Hard work + Unrelenting determination + Bigger pockets = The best year ever!
    Justin Schnettler
    Replied almost 9 years ago
    Thanks John. Hard work is definitely a key component, while holding down my full time job I rarely slept, but it was definitely worth it after looking back. I do what I love everyday now. Reply Report comment
    Justin Schnettler
    Replied almost 9 years ago
    Thanks John. Hard work is definitely a key component, while holding down my full time job I rarely slept, but it was definitely worth it after looking back. I do what I love everyday now.
    Kevin Kaczmarek
    Replied almost 9 years ago
    Fantastic work Justin! A True testament to success.
    Justin Schnettler
    Replied almost 9 years ago
    Hey Kevin, thanks for the kind words.
    Jeff Brown
    Replied almost 9 years ago
    So happy to read this. Stellar results using a superb resource.
    Justin Schnettler
    Replied almost 9 years ago
    Thanks Jeff. BP has been invaluable to me. Its a great resource for everyone. Josh has created a world class website.
    Jeff Brown
    Replied almost 9 years ago
    So happy to read this. Stellar results using a superb resource. Reply Report comment
    BryanA
    Replied almost 9 years ago
    a face only a mother could love….great interview!!! way to go justin, very inspiring
    Justin Schnettler
    Replied almost 9 years ago
    What ?!? My mom told me I had brains and beauty, hopefully they both weren’t lies. I’m glad I provided some inspiration for you.
    Morgan
    Replied almost 9 years ago
    The power of the internet! Huzzah! Great story!
    Justin Schnettler
    Replied almost 9 years ago
    You are right Morgan. I stopped going to local REI meeting after discovering Biggerpockets. I can network from anywhere in the world and on my time.
    Stephen McKee
    Replied almost 9 years ago
    Awesome story!!! I had so many deal slip through my fingers in 04 until I had a mentor. This site is full of great info and great people.
    Justin Schnettler
    Replied almost 9 years ago
    Deals slipping through fingers is probably the hardest part with starting out, there is a lot of rejection and it was hard to handle. But once you build your alligator skin, it gets easier that is for sure.
    MH
    Replied almost 9 years ago
    What a great interview! So good to hear a great real estate success story like this. Congrats to Justin and Vikram!
    Justin Schnettler
    Replied almost 9 years ago
    Thanks MH, Vikram and I very happy to come this far, our road definitely had its bumps.
    Mike
    Replied almost 9 years ago
    Very encouraging interview for those of us just starting out on the journey. It shows where hard work, passion, some direction, and teamwork can get you. Well done Justin !!!
    Jason Sandquist
    Replied almost 9 years ago
    The dealmaking is out there and this proves it. So incredible to hear how it all got started here.
    Justin Schnettler
    Replied almost 9 years ago
    Thanks Jason. Deal making is definitely alive and well. Glad to see you post on here, I follow your tweets all the time.
    Marc Freislinger
    Replied almost 9 years ago
    Congrats Justin! Keep it up!
    Justin Schnettler
    Replied almost 9 years ago
    Thanks Marc
    JonK
    Replied almost 9 years ago
    Great work, Justin! I know you’ve worked extremely hard and stayed very focused to get where you are. Thanks for the inspiration.
    Justin Schnettler
    Replied almost 9 years ago
    Thanks Jon, I know you’ve worked just as hard (or even harder) to get where you are at as well. You are a true testament to success.
    JonK
    Replied almost 9 years ago
    Great work, Justin! I know you’ve worked extremely hard and stayed very focused to get where you are. Thanks for the inspiration. Reply Report comment
    Shae Bynes
    Replied almost 9 years ago
    Phenomenal…..I love stories like this that show the power of relationship building on the internet. Way to go Justin!
    Justin Schnettler
    Replied almost 9 years ago
    Thanks Shae, I see your blog is still rocking!
    Josh Green
    Replied almost 9 years ago
    great story! awesome to see some more BP success stories! Both are great guys and assets to the site!
    Justin Schnettler
    Replied almost 9 years ago
    Thanks Josh. BP has been great to me, and I hope it does the same for others.
    Justin Schnettler
    Replied almost 9 years ago
    Thanks Josh. BP has been great to me, and I hope it does the same for others.
    DRightOne
    Replied almost 9 years ago
    Great interview and good tips too. I hadn’t thought about using an interior designer on some houses.
    Justin Schnettler
    Replied almost 9 years ago
    DRightOne – The interior designer was really key for us. We only use them on higher end homes now, but that is only because we know the color scheme now for our middle class homes. We repeat it and they all end up looking professionally designed.
    Justin Schnettler
    Replied almost 9 years ago
    DRightOne – The interior designer was really key for us. We only use them on higher end homes now, but that is only because we know the color scheme now for our middle class homes. We repeat it and they all end up looking professionally designed.
    Mike McKinzie
    Replied almost 9 years ago
    Great story Justin. And great idea on expanding to other states. My father stuck only to CA and did one deal in Texas that went sour, so he never left California again. I took over 2 years ago and now have property, not only in California, but Arizona, Colorado, Texas, Oklahoma and Viriginia. Having all your Real Estate in one market is like having all your stock in Enron. Just ask those who invested in only Las Vegas over the past 10 years.
    Cary Moody
    Replied almost 9 years ago
    Wow Justin…this is truly inspirational! I just joined this site 30 minutes ago and this is the first article I stumbled into! My husband and I think we have a winning formula! Justin will you be our mentor? 😉 We have BIG dreams and an even bigger drive to get there!
    Cary Moody
    Replied almost 9 years ago
    Wow Justin…this is truly inspirational! I just joined this site 30 minutes ago and this is the first article I stumbled into! My husband and I think we have a winning formula! Justin will you be our mentor? 😉 We have BIG dreams and an even bigger drive to get there!
    Mary Fox
    Replied over 8 years ago
    Great article. Inspiration for those of us who are new to investing! Thanks
    Markus Toivio
    Replied over 8 years ago
    Great story. Really enjoy reading this kind of success. Specially being beginning of this path. 🙂
    Edwin
    Replied over 8 years ago
    As an engineer, myself, your story has definitely inspired me to keep moving forward as a REI. Thanks for sharing and good luck with your future endeavors…
    Vito Boscaino
    Replied over 8 years ago
    Justin – Nice piece. Sounds like you have a nice business going. If you decide to make an entry into the Ohio market, please keep me in mind. I appreciate the opportunity to partner with successful professionals and I like you attitude. Have a great weekend! Vito Boscaino Encore Asset Management of Ohio Realty Dublin, Ohio 43017 614.571.9054 Mobile
    Dexter M.
    Replied over 8 years ago
    Great Story! Much success to you both.
    Barry Siegel
    Replied over 8 years ago
    Thanks for posting this very inspirational story. I lost my job last summer and have just recently decided to try my hand in residential real estate investing and this story has bolstered my efforts.
    Joshua Dorkin
    Replied over 8 years ago
    Thanks for your message, Barry. That’s what this site is all about. If you’re interested in moving forward in real estate investing, definitely be sure to jump in and start reading. Good luck to you. If you have any questions, please don’t hesitate to ask on our forums.
    Melinda Allen
    Replied over 8 years ago
    Wow Justin! Thanks for sharing your ‘get it going’ experience! Your point about being an active poster on BP is great advice. I read all kinds of posts and article but haven’t really participated. You have inspired me. I have a question for you: When you started, roughly how many rejections did you get before you landed your first ‘yes’? It is hard to handle rejection, getting over it and getting on with the next one can be discouraging. Any thoughts?
    Melinda Allen
    Replied over 8 years ago
    Wow Justin! Thanks for sharing your ‘get it going’ experience! Your point about being an active poster on BP is great advice. I read all kinds of posts and article but haven’t really participated. You have inspired me. I have a question for you: When you started, roughly how many rejections did you get before you landed your first ‘yes’? It is hard to handle rejection, getting over it and getting on with the next one can be discouraging. Any thoughts?
    Justin Schnettler
    Replied about 8 years ago
    Hi Melinda I’m not sure how many offers were rejected but it took me 8 months to get my first deal. Is that what you were asking?
    Eric Karlene
    Replied over 8 years ago
    J, It’s AWESOME to see how far you have gone! Going over the first few deals were pretty bumpy but it’s amazing how smooth the road is for you now! Good job and keep going! (Vikram, Good Job keeping J in line!) – E
    Justin Schnettler
    Replied about 8 years ago
    Thanks, Eric.
    Jim Loro
    Replied about 8 years ago
    I am working in commercial real estate and am looking for some direction on how to divide up the deal for multiple partners. I have several commercial properties that are ready to close. I would appreciate some guidance in this area.
    Joshua Dorkin
    Replied about 8 years ago
    Jim – Please jump on our real estate forums and post your question for our entire community to see. Good luck!
    patrick mcclellan
    Replied about 8 years ago
    Hi Justin, I am starting to get involved in the Inland Empire with regards to real estate investing. It is located in eastern Southern California. I noticed you want to expand your area. I am also an agent in the area and my company specializes in foreclosures from banks we deal directly with. I would like to start out individually investing out here with partners that can help teach me and I can bring strengths to the table. There is a lot of money to be made in certain area’s that I am familiar with. If this way is one of your targeting expansion area’s I would love to speak with you to see if we could work together from an investment side. I have some cash to bring to deals. I look forward to hopefully hearing from you. Sincerely, Patric
    Andy Fields
    Replied about 8 years ago
    Really interesting read, I had similiar experiences first time around and am now ‘sniffing’ around for real estate again – hopefully i’ll learn from the previous mistakes which was also spending too much on labour and materials and bad budgeting..!!
    Aaron
    Replied almost 8 years ago
    What do you mean by “then ramped up and have acquired 8 figures in properties together?” Does this mean you purchased these properties for rehab and flip or you are currently holding $10M in real estate? The title of the story and this statement lead the readers to believe that in less than 2 years, you have purchased and are now holding $10M in real estate. I am not convinced that is the case though. I think you have purchased these properties for rehabbing and flipping. Based on the picture in the article, this could be less than 15 properties. If you are holding properties, what method of financing are you using?