4 to 20 units in 12 Months

2 Replies

365 days ago I had four units. I primarily stick with 3 bd 1 ba units. Average rent is $800 per unit. Then I found a quadplex and ran the numbers. Presented the numbers to a potential investor. I utilized the strategies that I have learned to utilize from Bigger Pockets to identify when and how to approach a potential investor. I wrote up a note for a 50k initial investment and my investor signed the dotted line. Just like that I doubled my units. My investor ran out of capital and I did too. I kept looking at my market and saw a 6bd 2 unit for sale at 55k. The house needed 4k of cosmetics work. The gross rent would be $1700 x12= $20,400 and I had it under contract for 48k. That is a cap rate of 40% without deducting the usual. Who cares at 40%. How did I find the capital? I took out a 55k personal loan and then things started to roll. This property currently cash flows $800. My personal loan will be paid off in 5 years. After I took out the personal loan and used it to buy the property out right, I had 60k in equity in the house. I leveraged 60% of the 60k appraisal of that house to buy a 4 unit at 91k (Gross $2,900). I took out another personal loan for 35k and bought a single family home . That personal loan will be paid off in 2 years from the $950 rent and I now have 45k in equity. Multiply 45k x.6= 27k in equity for another purchase or down payment. Yesterday I bought another 2 unit with cash 75k = Net Rent $1,400 and I have another 4 unit under contract. The snowball effect is crazy and fun. Utilize your network, credit and equity and the ball will never stop. Be persistent! Get in the game!

yes! I find it easy once you understand how to pick quality tenants and handy man of two. I live 150 miles from all of my properties. I would never pay 30% of gross to have someone mange.