40 Units at Age 22!
From what started with a mere $28,000 single family home just two years ago has now grown into a portfolio of 40 rental units. Shortly after moving back to Indianapolis where I grew up, I began shopping for inexpensive single-family homes. In May of 2017, I closed on my first SFR (single family rental) which later spiraled into 5 more SFR purchases within the same neighborhood (I must have knocked on every door asking folks if they wanted to sell)! As I immersed myself in the single-family space I quickly realized that I was unable to scale to the degree that I would like. I would have to buy the entire neighborhoods!
After reading every real estate book that I could get my hands on, coupled with numerous podcasts, I realized that multi-family complexes made the most sense. The economies of scale attracted me as I continued to self-educate and shop for properties.
Approximately 1 year later after the purchase of the first SFR, I located a 10-unit apartment complex that I did a 1031 like-kind exchange into selling every SFR that I had. Post-acquisition I began increasing the gross monthly income and chipping away at expenses.
In doing so, not only did it prove the concept to my partners, but it gave me confidence because a project that I had sourced was finally coming full circle! While searching for more multi-family opportunities I did pick up the one and only single family home that I have today. It was practically given away at a purchase price of $16,000 with 10 year tenants in place paying $550/month + utilities.
As of yesterday, almost another full calendar year later following the purchase of the 10 unit building I closed 3 more properties totaling 29 units made of 2 apartment complexes (8 units & 19 units) and a duplex.
In my short amount of experience, I'd like to share a few things:
1.) Be patient. It took me almost a full year to purchase things that made sense for my underwriting criteria. Do not get emotional about these properties because when you act on emotion you can quickly lose your shirt!
2.) Hyper educate yourself. Pick up every book that you can that has to do with the niche you are wanting to pursue. Every opportunity you get use it as time to educate yourself whether it be in the car driving or at the gym. Throw a podcast on or take a book to read while on the treadmill!
3.) Network, network, network! I cannot stress this enough. Get in a room where you are the smallest player. Pick someone that is doing what you are doing and learn from them. Watch what they do and see how you can potentially add value to their business to learn even more. Spend the money on coffee, lunches, dinners, etc. You never know what can come from a 30-minute meeting!
Cheers & happy investing!