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Ujwal Velagapudi
  • Investor/Agent/Entrepreneur
  • Dallas, TX
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464
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25 units under 25 months, before 25 years old!

Ujwal Velagapudi
  • Investor/Agent/Entrepreneur
  • Dallas, TX
Posted Jan 2 2017, 12:05

This post is a bit overdue as I've already turned 25 a couple of months ago, but I wanted to share my story with the BP community.

When my parents were buying their first home 15 years ago, I would ride along with them for nearly every home they viewed. At 10 years old I would soak up a lot of the information I heard on listing sheets, locations, pricing, remodeling, terminology, styles, etc. when our realtor would explain and showed my parents. That stuck with me, especially the financial side. When I decided I wanted to invest in real estate, I initially turned to the same realtor that had helped my parents to help guide me in my first investment purchase.

I started looking in slightly higher end suburbs of SE Michigan in 2014, looking almost exclusively for small condos in the $120k-$180k range. I spent 6 months of researching, having multiple offers rejected, and annoying my realtors (I went through 4+) for trying to find the right deal. One day I was searching in Craigslist for condos, and stumbled across some cheap properties in the city of Detroit. It absolutely blew my mind at the prices, and the potential rents. I quickly shifted my attention to properties in Detroit. It was almost exclusively due to the extremely low prices and relatively high rents which would yield a much higher return than what I was looking at in the expensive suburban condos.

I went for it and made my first purchase, a 3 unit commercial property I negotiated down to $20,000 cash, where I inherited 2 tenants paying $1,000 total. I had purchased this from an elder gentleman who formerly was an occupant for nearly 20 years with his own business. I thought it was a fairly decent deal considering he had maintained it well, it has always historically had a great net cashflow, and it was something I thought would be a good first investment.

I eventually went on to stick with commercial units and worked to negotiate and find excellent deals with other owner-occupants who were all looking to retire. The average age of the sellers has been 70+, all owner occupants who were looking to simply retire. They had maintained the property well, and held good occupancy rates throughout their ownership. I have been trying to stick to a rough guideline of purchasing for $10k/unit with a minimum rent of $500.

Before my 25th birthday and under 25 months of starting my company, I had accumulated 25 total units from a total of 5 properties. These are all commercial or mixed use properties in the SE Michigan area. All my self managed 11 Detroit units are 100% occupied with long term leases, and my newly acquired larger 14+ unit building has 10 tenants so far.

Property 1: 3 unit retail storefronts

Property 2: 4 unit, 2-story mixed use. 2 storefronts, and two apartments upstairs

Property 3: vacant lot adjacent to property 1. Bought this for my tenant to help her business.

Property 4: 2 unit storefronts

Property 5: 2 unit storefronts

Property 6: 14+ units, mixed use. Two buildings, warehouse & commercial office space + apartments

I had self financed my first purchase with my savings from my first year of working my full time job, and living on a set frugal budget. This had slowed down my purchases dramatically, as I wasn't able to find any financing for properties within the city of Detroit due to location, my age/lack of financial history, business history, etc. My second purchase was the only one that I had very reluctantly resorted to a loan from my parents, only due to timing constraints on closing (and numerous failed attempts to obtain traditional financing) and not wanting to liquidate my stocks portfolio. I ended up paying back the loan as quickly as I could, in 4.5 months, and paid nearly 23%+ in interest. I will not do business with family or friends, so my lack of a professional network when I initially started hindered my growth as well. It wasn't till my most recent purchase that I was finally able to secure a commercial business loan from a small credit union. Aside from the financing, running this business solo with no outside help, and no mentor that I could look towards has been a bit difficult at times. Thankfully the last few months I've been on BP, I've been able to learn quite a bit and have already made real connections within the forum as well as other networking events. 

Real estate, along with a frugal lifestyle, has allowed me to invest in other ventures as well. I had purchased a very small sports bar in downtown Detroit earlier this year. I hope to grow my investments to other industries as well. I have also started helping a few people by sharing my experiences & knowledge to make their first investment in real estate, working as their agent.


My short term goal is to be able to quit my 9-5 day job, and start another business that I am truly passionate about, while always having my real estate business steadily growing to new levels! I would like to start working with others to collaborate on larger syndicated projects this year, as well as go through working on my first fix and flip. I am always looking to learn from others, so I will be developing my professional network as well as growing under mentors.

Real estate investing has been a great way to begin, where a newbie like me could get started without any prior experience and learn on the go. There are so many niches within real estate that you can get started with very little money, and develop your business into other areas. I've learned to just jump into it and do it, and that waiting for the perfect situation may cause me to miss some great opportunities where I can grow from. The three biggest factors that contributed to my growth in this business are having a frugal mindset, a positive attitude, and the grit to want to accomplish my goals. Happy 2017 to everyone, let's have a great year!!

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