7 buildings 20 units 18 months thanks to BiggerPockets

88 Replies

@Philip Williams  

Congrats.  I am a newbie and very encouraged by your story.  Keep up the good work. 

I think what Ben might have been alluding to is not to grow too quickly where several minor/major events at your various properties could sneak up on you. For instance a roof needs replacing, a furnace breaks, pipes burst and flood wood/carpeted floors.  Tenants feel slighted/resentful stop paying rent, you need a lawyer...  What if all these happened at once and needed $20k thrown at it, how would that affect you?  From what I understand these things WILL happen but if they happen before you have experienced them and if several incidents happen at one time they can potentially break you or put some real barriers in front of your growth if you are just starting out with several properties.

@Ben Leybovich   would love your reason for the comment. (big fan of yours BTW)

 @Michael Henry          oh I agree those things can and do happen! If for instance 20k in repairs happened to pop up I would just shrug and take care of them. I have adequate reserves actually 3 of our building are owned free and clear. I wasn't really questioning @Ben Leybovich  logic rather trying to get him to explain his reasoning. I know a lot of people get over extended don't plan for maintenance etc....so when someone posts something I almost always ask the reasoning behind even if I already know the answer. My logic is many more people than just those commenting are reading all the posts trying to learn. 

Guys - there is no magic to this.  Always remember the following 2 things:

One - you don't know what you don't know...in fact, you don't even know to ask!

This is not a commentary on anyone's intelligence, but on experience

Second - stumbling blocks and stepping stones look a lot alike...the problem is that most people learn which is which by stepping on one.  Unfortunately that's painful indeed.  The other way to negotiate this obstacle course is with the hindsight of - experience.  Experience ...!

Now - you can tell me that this is exactly what you are doing - buying units to gain experience.  No - you are playing the game.  You won't learn until you sit down and study the tapes of this game - what did they do, how did you respond, what can you do different next time, why bother...?

Investing is like wine - seasoning is key.  Seasoning = Perspective

I applaud action - this is the first step and one that most people never take.  But, it is not the most difficult!  Sitting quietly in the dark and taking stock of where we are is a lot harder - takes discipline.

In music, we have notes and we have rests.  Most people focus on the notes - I focus on the rests.  The rest, the quite silence, puts color to the notes...

This is a blog post in the making.  You guys mind if I reference this thread? 

@Ben Leybovich  Of course not I would love for you to use this to help out others. If I can be of any help please let me know. I don't mind sharing the exact numbers rents etc if it would be of assistance? That's exactly the post some people myself included need to hear to learn and grow in there careers. 

@Gary Shaw We have some on the west side of the city and some in rockford. We are looking for good deals and properties with value, right now we are looking primarily for multifamily units. We aren't actually planning on buying anything for a few months until everything stablizes and we are ready to expand but if the right deal came along of course we would be interested. 

Great job  Philip and Ben is right.  I was visiting my uncle, who lives in Colorado Springs, a couple of months ago and at that time, I had eight houses under contract.  My uncle currently carries over $10,000,000 in 38 different mortgage notes and has a couple of rentals.  At one time, he owned 50 rentals.  He told me, SLOW DOWN MIKE!  When I said WHY?  He said, "You'll see".  Four years ago, I had 3 rentals, today I have 26.  I had more a few years back but unfortunately divorce took a bunch of that.  And while I want to reach a minimum of 50, it's not going to happen this year.  I am only 53.  The term Ben used, "SEASONING", is an excellent term.  You need to get reserves built up.  You need to see if any large expenses come unexpectedly (and they do!).  You need to make sure tenants are stable and quality (a well fought eviction can go six months).  Obviously, you want to take advantage of good deals when they come, but just because Burger King has a $1.00 Whopper doesn't mean you need to buy 100 of them.  Each property you purchase carries inherent RISK and inherent REWARD.  You won't know either until you have owned them for a while.  This is where the 'seasoning' comes in.  Slow and steady wins the race while the rabbit is taking a nap!  Keep up the good work.

Great job @Philip Williams , and thanks for posting your story.  Good luck on your investing.  Be careful about getting too big too quick.  You might try flipping one of your new purchases to get more seed money other purchases.  I am out of money while waiting for a flip to sell.  It has been on the market for 2 months, then its time to go look for another one as soon as its sold.  I hate waiting hehe.  I try to keep a little put back for those killer deals when they come up, but found one of those, then sold it to a friend who has been looking for a house for a year.  It will take 60 to 90 days for it to close.  Not being able to get your money back in play can really slow you down.

@Jerry W.   Thanks for the advise and I certainly will be careful about getting big to quick! I am going to be out of money after these deals come to fruition but only for a few months and I will be paying down the couple loans and mortgages we have. All three of the duplexes we currently own are paid off and we will be purchasing one more cash out of the next four deals. After about six months with the cash flow and refinancing we should be ready to get more if we so choose. We are also in the process of starting a full service property management company in the area with our properties all being managed by that entity. We have one property manager at the moment who is awesome, I trained her myself she basically shadowed me for a couple months. 

That is awesome! As a newbie, I can say your story is definitely motivational and encouraging. I'm glad I stumbled across Bigger Pockets and I'll be sure to use the resources found here.

Keep up the good work!

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