7 buildings 20 units 18 months thanks to BiggerPockets

88 Replies

So I decided to give a shout out to bigger pockets. I decided to start investing in real estate 18 months ago at the time I owned 1 condo that had been in the family for years. It was in a nice neighborhood was payed off and cash flowed about 100 a month. I decided moving into multi family was something that I was interested in, over the next year I sold the condo and bought 3 duplexes with a partner who also had very little experience in real estate.

We were moving along but very slowly, I had no idea how to finance any more deals. I had never heard of creative financing and couldn't get a bank to give us anything due to the lack of company history and our debt to income ratios being high. We had no debt besides mortgages but banks wouldn't budge. 

Everything changed about a month ago when I found bigger pockets. I decided to educate myself and started searching for info. I had never read a real estate book or listened to a podcast as of a month ago. Then I found the bigger pockets podcast which led me to the website. I couldn't get enough I listened to the podcast constantly four sometimes five episodes a day. I read every article I could find made a page and started searching alternative methods of funding. 

I currently have four closings set up in the next 2 months. A six unit building owner financed closing 7/15, a four unit closing 8/1 and two duplexes one on 8/7 and the other 8/15. None of this would have been possible without the knowledge I gained on the podcast and on the forums. It took me 16 months to amass 6 units without bigger pockets and 2 months to amass 14 more with it. Just wanted to say thanks to the everyone, those I met at the Chicago REA and those I interact with online. I will continue to update this thread if anyone is interested and post the exact numbers from the individual buildings.

That's awesome that you've put together that many creative deals in such a short time! Keep the momentum rolling :)

@Philip Williams  you are an example of the power of taking action! Congratulations for your success!

Thanks I intend to keep it moving appreciate everyone reading and commenting!

How did you find your deals? What methods for purchase did you use?

@Philip Williams , Congratulation on your sweet success:)

Like @Gavin McMorrow I would also like to know how you got the leads for the multifamily units?

Also, if you can share the numbers for a 4-Unit for an example, that would be great.

Like List price, Purchase price, Total cost of acquisition (closing cost, rehab etc.), then

how you did the financing ( 25% down etc.), monthly expenses (Tax, PM fee, reserve etc.) and gross rental and net Cash flow...

Cheers!

@Philip Williams  - You rock!  That's so awesome . . . I'm really impressed.  Please keep us posted with how these deals close and keep sharing your story with the rest of the community.  Congrats!

Wow that's awesome, and I'm very interested in how you made this all happen as well, as this is exactly what I'm interested in and looking to do myself!

Congratulations!

@Gavin McMorrow @Gautam S. @Joshua Dorkin  

I'll try not to make this response to long lol, but the condo and the first three deals were found off the mls. I had never thought about finding deals any other way. After listening to all of the podcasts it struck me that there are other methods of finding deals. The first deal I found was the 6 unit I found it off of Craigslist under real estate for sale. The next three building I got a lead from one of my workers. I tell everyone I work with in my investing area to keep an eye out for properties, that includes contractors, property manager, plumbers etc.....I let them know what I am looking for and if I purchase a property based off there lead they will receive a referral fee from me. So that covers how I found the deals. 

Here are just some quick numbers the 6 unit was listed for 125k 2-2bd 2-1bd 2 studios. The total gross rents are 3150, I can force a little bit of equity in the form of raising rents to include laundry facilities. There are three garages on the property the former owner used for storage, I can rent these out potentially to tenants, paint change out carpets etc...As for as rehab costs this one doesn't need any immediately. It is fully rented out so the first thing that will be done will be hall paint and carpets. Then as tenants leases expire we will go in and clean up the units, new appliances if needed. Carpet might get ripped up and some type of hardwood put down etc. Oh and we negotiated the price to 110k, and are putting down approx 18% which comes out to 20k and it is owner financed 5 year arm with an option to renew and a 7% interest rate. 

The four unit was listed for 70k they are all spacious one bedrooms rented for 425ea. This was undervalued in my opinion and I estimate the actual value as around 88k. I tried negotiating them down and they weren't willing to budge as they had a mortgage on the property still. Instead of trying to shave a few more thousand off I decided it was wiser to lock up the deal before they decided they should actually list it with a realtor which they definitely should have. This also doesn't require any rehab 3 units are currently rented out this was a family owned investment for the last 15 years so they took much better care of there places than the average owner. They actually live next door to the property.

Hope this story will maybe help inspire someone to take that first step, I was pretty frustrated with the banks before finding the podcasts. They really lit a fire under me to not just walk in get denied then shrug and wait a couple more years can't thank @Joshua Dorkin and brandon enough for the info I have learned!

Good for you!

Now - slow down.  You'll thank me later :)

@Philip Williams what an awesome and inspirational story!! Very happy for you and definitely a result of taking action

Applied knowledge is power, and this is a great example.

@Ben Leybovich   well thank you for the advise but taking suggestions without sound reasoning isn't exactly a smart decision in any situation. Not saying I won't or am not planning on it but if your going to say slow down at least day why lol. 

Be careful you don't grow too quickly. Buying apartment buildings is a lot like buying shoes. You don't just walk into the store, grab a pair off the shelf and walk out. You have to try the building on. Walk around and see how it fits. I've seen people with more than 100 units implode because they grew too fast and bought lots of properties wrong. 

You're just getting started. Make sure you're making the right moves so you can play the long game.

Damn I need to do more BP reading! Good job bro.

@Aaron Mazzrillo thanks for the advise, I have certainly considered this. I don't have a day job so I have a lot more free time to research than the average investor. I am very familiar with my market average rents, good areas bad areas etc. my plan was actually to sit and collect rent for a year before expanding anymore. The last three buildings literally fell into my lap and are under contract about 20% of there actual value not arv. So if I felt the need all three could be resold for an immediate profit if I felt I was stretched to thin.

Congrats! This is an amazing good experience, and I think it's encouraging. My problem is trying to know exactly what to do with my loan, how to split it up, and where to buy in Nashville area for best ROI.

What are your focusing on..?

@Philip Williams  Congratulations on your success! I hope you continue to share your insights at BP!

Account Closed I am focusing on buy and hold at the moment and by at the moment I mean the next several years. I have never had any flipping or wholesaling aspirations but of course if the opportunity presented itself I would pursue it. 

@Philip Williams   Very inspiring! Joining and interacting on BP is like you have opened pandora's box of information! Ha!

Congrats to you on your new investments. Keep us posted on how things work out. 

Which Chicagoland REA did you go to if you dont mind me asking? 

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