Anyone start out buying a LOT of properties?

Question

I am not brand new to REI...bought a property in 2005.  Well, until this year, I haven't thought seriously about more REI...bought second in September from an auction...didn't get deed until Nov, so it's still not completely rehabbed, but will be by Jan.  But before the end of the year, we will close on 4 more properties...3 rentals and 1 flipper.  The rentals are all in Michigan (where we're from) and were all cheaply priced.  We're getting all 4 for under Half of what I paid for the one property we already have there...to be specific, we're getting all 4 for $24k.  Anyways, 2 of them only require very minimal work....less than $1k....all are in decent neighborhoods.  This is very exciting, but nerve-wrecking at the same time.  Has anyone else started out like this...I mean, DIVING in because there's so many great deals?

Brandon Kamm · Answer

One of the biggest mistakes I believe people have made is thinking I have to buy xxx houses this year. I am amazed at the number of investors that call us saying that.  People have always asked me how many properties I plan on buying in a certain period of time.  There is no set answer if there are no deals to be found there aren't properties that need to be bought, if five deals that fit your criteria happen to pop up in a short period of time you need to be able to act on all.  It may seem like a lot of work at once, but if you are buying good deals it will work out in the long run even when doing multiple ones at once.

Katrina P. · Answer

Btw, yes, I have a day-job, but I can do some things (make calls) from work.  My dad is on hand where the properties are to manage the contractors, so we're good there.  Sometimes I feel that this is just unreal.

Timothy W. · Answer

I bought 12 the first year I really got serious about it.  I spent the next 2 years getting them all performing and asking my self why the heck I started off by buying 12.

Buy 1 then don't buy anything else until that 1 is performing.  Only then buy the next one.  It doesn't matter how fast this process is for you, only that you follow that basic process.  I remember in one 2 week period I suddenly owned 4 more houses than at the beginning of the month.  I'll never do that again...lol

Vikram C. · Answer

I bought 8 figures in houses in my first year.  This year is probably also going to be in the 8-figures, but we should hit 9 figures next year.  The amount you buy really depends on your skills and resources.

Here's an interview of my business partner for any new person who wishes to read it:

http://www.biggerpockets.com/renewsblog/2011/01/11/justin-schnettler-biggerpockets-interview/

Steve Babiak · Answer

Home inspectors are required to partake in something like 100 inspections as an apprentice before they get their own credentials.

Mark Forest · Answer

Newlife:

Considering how cheap those houses were how were you sure they did not have serious problems?  I want to take a home inspection class to learn more about this aspect of purchases.

Mariah Jeffery · Answer

Most of them had tenants in them already, although they had deferred maintenance so I usually waited until the first turn-over, fixed them up, and raised the rent.

The last set of 4 single families I bought had only one with a tenant. One was ready to rent and the other two needed serious work to get them ready. My team is still working on the last one and we have not found renters for any of the new ones yet.

I'm not funding them all through my local credit union.

Katrina P. · Answer

Thanks for responding, Mariah.  So how long did it take you to get all your properties performing?  Also, what method are you using for buying...bank, credit union, hml, etc?  Thanks

Mariah Jeffery · Answer

I think you have to be prepared to buy when the deals come up. I bought my first rental in March '07 and then waited patiently until Sept. '09 until I found another deal, then another and another in rapid succession. I had 2 rental units in the beginning of 9/09, then by 3/10 I had 19. I just kept finding good deals and I was closing on a property every month. From 4/10 until about a month ago I just couldn't find anything worth buying or I got outbid on everything I was interested in. Finally, 8 months later I found and closed on my best deal yet, 4 single families in a package. Yes, you can get in over your head but as long as you have a plan and a good team in place, you'll be fine.

Katrina P. · Answer

Thanks for all your input, guys.  Yep, I'm currently lining up all my ducks, making sure my system is in place, etc.

@ Jeffrey, I know, right?  $24k for 4 properties is crazy!  No, it's not Detroit...it's a small town (where I'm from) that no one would probably know much about.  But since I'm from there, I know all about it.  The prices are absolutely crazy, and there's no problem finding decent tenants.  The two that require minimal work LITERALLY just need to be cleaned, and have touch-up painting done.  All appliances are still in place, and the utilities are still on.  The hardwood floors and trimwork are in great shape.  One of them is a two-unit..the other is a 3-bedroom.  They are basically giving these houses away.

Anyone start out buying a LOT of properties?

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