0-25 units in four months and it all started with Bigger Pockets!

160 Replies

@Stephen Anthony One major area that has helped deal flow is sending out direct mail letters to targeted individuals. I also cold call owners and continue to follow up regularly with real estate agents. Best of luck growing your business!

@Collin Schwartz Wow this is very fun to read. Collin, you have been making leaps and bounds that are truly inspiring. I'm honored that our paths have crossed, and I will continue to service you to the best of my ability in our journey through the market. 

I will be coming into a new lead for another portfolio of properties that I'll send your way once they make themselves available. 

I know I've said this before, but if you have any questions, please don't hesitate to ask!

(That goes for anyone here!)

Hi @Matthew Fitzgerald My investments are local to Omaha. I actually am involved in the entire deal process from beginning to end. I will market to individuals, negotiate if an agent is not involved, writing up contracts, working with title/insurance, managing, and GC'ing remodels. I however do not do any of the physical remodeling.

@Hersh M. there definitely is added risk to having a fixed rate for either 5, 7 or 10yrs with a 5 yr price (my current funding breakdown). It does force me to purchase with more stringent criteria. Also my CPA recommended for some of the tax advantages. Also I have noticed that fast closings are enticing to a seller and can help strengthen an offer.

Regardless it does worry me a bit, for my most recent deals I have done a 15 yr am to accumulate more equity in case of a major increase in interest rate.

@Collin Schwartz

Congrats Collin, great job ramping up so quickly. Out of your 25 deals, how many were MLS versus other sources like DM / coldcalling? What did you use for putting together targeted lists?

@Ray Lai

Eight units were MLS (2 deals), six units direct mail/cold calling (3 deals), and eleven units (1 deal) were brought directly to me from my partner as an off market deals. I actually pulled a list from listsource and targeted my ideal market. I then got phone numbers from zabasearch.

@Collin Schwartz

Thank you for your quick response and demonstrating that multiple pipes to feed the deal machine is the way to go for speed and efficiency of scaling up! 

@jenifer s wish I could tag you on this, this is a perfect thread for you to read after posting your question about lead generation

Truly amazing story! Especially based on the amazing prices you guys have. Currently, In Toronto and surrounding areas it's not uncommon to see properties being bought/sold based on cap rates as low as 4-5%. The creative 100% financing is quite impressive considering your high amounts of cash flow.

I was wondering if you could elaborate on the financing overall as a whole, and also how you are paying back the loans ? Is the majority of cash flow going back into pay off the properties, or do you plan to let them flow for a while longer ?

Congrats Collin, I read Rich Dad Poor Dad and it lead me to do great things as well, it really changed my life too.

Anyways, I am new to this... but what I can gather is you used a LOC to finance one purchase with a mortgage , then rented that place out and took all the equity out of the new place to put a down payment on another place? Am I following?

What type of down payments do you put? And how do you get funding for each additional acquisition?

It's interesting because I am thinking about investing in the same area although I am out of state. I would really like to talk sometime once I get my ducks in a row. The biggest challenge I have is understanding how to fund each purchase, is there a simple way to illustrate that?

@Collin Schwartz - awesome to see man! Would you be open to sharing what bank you ended up working with, assuming you've used the same lender for all your financing? Is your bank only a loan originator or do they still hold all your mortgages? I've been talking with several Omaha area banks and credit unions and am definitely interested in expanding that list to lenders who have worked well for others. Thanks for sharing your insight and successes!

@Spiro Klonizakis and @Burke Ericson For all of my properties I am using a HELOC to fund all of my portion of down payments. The typical down payment is between 20-25%. The HELOC allows me to make drawers as I so choose to do. The terms are interest only payments, 5 yr fixed interest rate of 4.75%. There is no prepayment penalty, so to accelerate payoff I use portions of my salary and have reduced 401k contributions. Currently I have not taken any drawers of cash from the properties. All properties have required some rehab and vacancy to accommodate the rehabs. My plan is to start taking quarterly cash drawers (from cash flow) in the next six months to a year so that I can build up my reserves. I do however pay myself a 10% management fee, which also provides tax benefits.

In a years time I hope to refinance some of the money out of the properties to purchase a larger property in the 20+ unit range. 

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