SUPER SHOUTOUT SUCCESS STORY: $6k gross rents in 90 days?!?!
BEFORE WE START: This is not my success story. This is the success story of @Steven Kwan. EVERYONE NEEDS TO READ THIS
Steven- feel free to chime and and help us out here!
***Full disclosure: Steven purchased property that I marketed to acquire***
Enough of that nonsense though. I wanted to get on here and shine the spotlight on Steven for his incredible mindset and willingness to make decisions + take risks. He went from HAVING NEVER PURCHASED AN OUT OF STATE RENTAL PROPERTY TO ACQUIRING 4 PROPERTIES THAT WILL BRING HIM GROSS RENTS OF $6000/mo IN 60 FREAKING DAYS FROM 1st CLOSE TO 4th!!! The best part is once he's gotten financing on the portfolio he will only have tied up 40-50k of his own money to get this. Word?!
A little background: Steven is a software engineer for Zillow (shame, shame... insert game of thrones bell ringing). He's not even 30 years old. He's not sitting on a fat pile of mommy daddy money. He's gotten into the game like any one of us could have an should have- without having to be some silicon valley-entrepreneur-prodigy. Managed money well, bought a home early, saved some more cash through a strong career that he's worked hard to build, and dove right in.
Here's a timeline:
1. Steven bought his first SFR out of state for 70k, turnkey style, 20% down, just around 20% ROI. This was the tester- not a ton of cash required, perfect property, C+ neighborhood, good property manager, in Indiana where the landlord tenant laws make this a pretty safe bet. $950/ a month in rents coming in from day 1.
2. Enter Steven's HELOC. He made another cash purchase. A BRRRR style duplex for 32,500, 15-20k rehab, 70-75k ARV. $1250 in gross rents once it's done. This one is a project- the Property management team is going to kick out a [nasty] tenant and do the rehab, then get some new tenants in.
3. Another SFR with some equity. This was a HELOC purchase too. 50k purchase, needs 5-7k rehab to be able to appraise for 70k-75k. Long term tenant in there paying 900/mo, market rents are 1100, but he's opting to keep the tenant in and try to bump rents in the near future instead of spending money on the rehab and cost of vacancy. Smooth move, Steve.
4. Cash cow time. Steven went SUPER HARD in a bidding war, texting me negotiations until 11pm at night until a price was agreed upon... while 26 other investors who had offered on this same property were either sleeping, waiting to hear back from their attorneys, or watching re-runs of "The Voice". Everyone keeps asking, "how do I get my offer accepted in a competitive seller's market?". This is how you do it. Steven went over asking to purchase this property for 95k- it's a duplex with a rentable basement and cottage on the same lot. Gross rents at the time of purchase were $2450 a month. They should be $2700/mo.
This guy knows how to get real. He did what I couldn't as a new investor- he effortless and efficiently drew the line between analysis and initiative, bulldozed through his inhibitions, and BOUGHT GOOD DEALS. He didn't sit and haggle over 1/2/3k until he found the perfect property a year later while his money sat in the bank/in his home and did nothing. He's in the game, and he's collecting rents.
Looking to the future: Steven's going to Refi, release over 80% of the funds expended to purchase these properties, and jump into more multifamily properties. He's also working to raise funds from partners to keep the acquisitions engine going. I wouldn't be surprised if he replaced his income (noteworthy: at a good paying job), by this time next year. Maybe, if I'm lucky, he will partner with me on a big-boy 50 unit deal soon :)
Give him some props BP! We should all think and act more like this.
Cheers!