Just curious. Who actually started from zero in multifamily

19 Replies

I’ve watched a ton of videos from folks that built up a nice multi family portfolio while holding down a six figure day job or that had tens of thousands to start investing with or that went from flipping houses straight into multifamily. But I’ve yet to hear from someone that truly started with nothing but hustle and found success in MF.  

Are there any success stories out there that you’re willing to share? Perhaps you began by first educating yourself on the business and then started finding deals for other operators Or you found a mentor that brought you into a deal on the GP team based on your activities towards finding and closing a deal. Please share your story. How you started and where it led you

I had read and talked to a few people about rental property. I started with one SFR and slowly built up to 32 houses. After I had about 10 houses I could use the equity from those houses for my down payment for the remainder. About 3 years after I started purchasing rentals, I was in the hospital for six months. I managed the properties myself until I was in the hospital and could not find a good property management co. People moved out and they did not find renters. I was losing money on the rentals. When I got out the total hospital bill, it was 5.5 million dollars. My insurance capped out at 1 million, so I owed 4.5 million. I still could not go back to work for another 6 months. I had to file bankruptcy and I had to throw my rentals in with my medical bills. Fast forward about 5 years and my mother died and left me about $20,000. I day traded stocks and accumulated enough to purchase 3 duplexes that were mismanaged and needed work. I got good management and started upgrading them. 3 yrs later I sold them for double my purchase price and put the money in a 1031 and currently purchasing with that money. I also flipped two houses and made 57K on one and 53K on another. Am currently looking for a 10-20 unit with that money. It is going slower than I would like it to. I think having a mentor would help me considerably.

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Hi Hassan,

I'd say that I would qualify as what you're looking for.  I bought my first investment property at 23 years old with the money that I made working as an assistant store manager for American Eagle.  I started my full time career with AE at 18 years old and was very budget conscious saving the strong majority of my money for the first few years of my career as I still lived at home and was financially linked to my parents.  By 23 I was earning around $20 p hour at my day job.  I bought my first 3 family house in 2016 for $99,000 and put around $100k into the renovation (I got a construction loan for $70k and had to front the rest).  Since then I have purchased 2 more properties with my cousin as a partner (6 units each) and just recently left my day job to focus on my real estate goals.  If I can provide any advice I would say:

1. definitely surround yourself with people or at least some one who knows what they're doing to support you... AND listen to them!  I have a very good realtor who sends me new listings in my area and price range every day and I review them every day.  I also have a fabulous insurance agent and lawyer won have helped me navigate some of the more challenging decisions including when to back out of a deal that isn't really a deal.  

2. have some money saved up.  so often I feel people try to navigate 'get rich with no skin in the game' options but in my experience I've had to invest money to make money.  I'm sure I've made some mistakes and overpaid along the way but I've definitely made more money than I've put in.  

3. Don't be afraid of a scary property.  when I bought my house for $99k (I live in New England, property is not cheap around here, it was just that bad) it needed new everything.  I replaced the roof, siding, plumbing, heating, electric and updated all interiors including kitchens and bathrooms.  It was a lot of work but the value of my property has grown exponentially from it (I just refinanced and pulled $150k in equity from the property) AND I never get maintenance requests for that property because everything is new and functioning correctly.  As long as the numbers work and you aren't afraid to roll up your sleeves you'll make money on a scary property and there'll be less competition for the purchase.  

4. Do yourself a favor and get a pest control plan in place.  Thank me later.  

Best of luck with your investing endeavors! Get ready for a wild ride!

@Hassan O. I can't say I didn't have some capital to invest, but money isn't what got me involved and accepted into large multifamily General Partnerships. The barriers to entry were more difficult than I had expected, but I kept networking with the right people in markets that I had an interest in (phone calls, Zoom calls, masterminds, conferences). I knew I had to offer value to the operators that I met with, and for me, that was submarket analysis, underwriting, and some marketing and content chops. Once they saw I had a skill set that fit there's, now we could find out whether we shared the same philosophies, and above all, if we liked each other. Now I happily have boots on the ground in the SE and Texas for our syndications. My two top areas of choice.

Originally posted by @Mark Jones :

I had read and talked to a few people about rental property. I started with one SFR and slowly built up to 32 houses. After I had about 10 houses I could use the equity from those houses for my down payment for the remainder. About 3 years after I started purchasing rentals, I was in the hospital for six months. I managed the properties myself until I was in the hospital and could not find a good property management co. People moved out and they did not find renters. I was losing money on the rentals. When I got out the total hospital bill, it was 5.5 million dollars. My insurance capped out at 1 million, so I owed 4.5 million. I still could not go back to work for another 6 months. I had to file bankruptcy and I had to throw my rentals in with my medical bills. Fast forward about 5 years and my mother died and left me about $20,000. I day traded stocks and accumulated enough to purchase 3 duplexes that were mismanaged and needed work. I got good management and started upgrading them. 3 yrs later I sold them for double my purchase price and put the money in a 1031 and currently purchasing with that money. I also flipped two houses and made 57K on one and 53K on another. Am currently looking for a 10-20 unit with that money. It is going slower than I would like it to. I think having a mentor would help me considerably.

 You sir are an inspiration! Thank you for sharing. 

@Hassan O. this is a great post, because at least 90% of people come/born from money, so its much easier for them. I am starting from nothing,  no one in my family owns properties and sadly they don't like to talk abut investing, that's why i am in this space and have connected with like minded people. I started saving last feb.  and i am at a place where i have been pre-approved for looking for a duplex to househack in the greensboro-fayetteville area in NC.

I was making about $40k a year in a sales job I absolutely hated. I think I have always had a bit of entrepreneur in me, so I will never thoroughly enjoy a job working for someone else. I only had like $5k in my savings and most of that was just emergency money. I started getting interested in real estate because I realized there are so many opportunities and ways to make money, actively and passively, so I decided to make a change.

I read tons of books on real estate for like 6 months straight, listened to so many bigger pockets podcasts and I was on YouTube listening to people explain different ways to invest, avenues, success stories etc. All in that time I lived frugally and saved a measly $10k to buy a condo with no money down (using a special Mass Housing loan) while working that job I hated. I then fixed up the condo myself while living there for cheap (kitchen, flooring, painting) and basically was in a little construction zone. After I finished it, about a year later, I sold it for $70k profit and then bought myself a duplex to house hack with a VA loan, using a creative BRRRR method that you can see on my profile if curious (zero money down again plus made $20k back). The crazy uptick in the market helped out, but also the drive to just start and make things happen is what started me. Now I am living for free and the slow snowball of properties have began.

I guess you can say I started from $0 and utilized no money down loans to get a few properties started. I educated myself and didn't have a mentor or anything, just learned myself and had friends and family help me renovate. I now network and talk to a lot of investors for advice though. Currently I am looking to possibly purchase an 8 unit property that will really get me going. This has all happened in 2021 so far, excited to see what I can do in 2022 and on!

I started with house hacking a duplex about 3 years ago. After that I decided I wanted to scale quicker and syndication was the route I was going to take.  I spent 6 months learning everything I could about underwriting syndicated apartment deals.  After that I partnered with two other more experienced operators and we syndicated an 89 unit apartment building (one year after the duplex).  Over the last two years we have syndicated 6 more deals.  I started with no big account balance and was working a $20/hour job.  It is possible, just takes a few years of grinding. 

We purchased our first duplex with $0 down and around $5000 in the bank at the time. We did a ton of DIY work in the early days to build sweat equity. We never had help from our parents and have been able to accomplish greater levels of wealth than they were able to. My Dad once said "I am sorry we didn't have money or a business to help you get started". I told my Dad that he taught me work ethic, which is worth far more than money. 

@Ashley Mitchell Most of my landlord friends worked hard building their business from nothing. If anything, sacrifice, hustle and discipline are the factors that determine success more than being born from money. Take pride in doing it on your own and use that self confidence to become unstoppable. When money is handed to people, they have no appreciation and learn nothing, because they had no struggle. Good for you on saving up that money in such a small period of time. Keep that up for several years and it will keep easier as your rental income starts to snowball. 

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We purchased an 8-Unit this year with 0-down and were paid management fees while fixing it up (although we do have experience). Have you read Joe Fairless's The Best Ever Apartment Syndication Book? This is an area where you can learn your way into big deals while making money doing it.

You are getting some great traction with this post @Hassan O. By content, I mean I had a background in creative writing, animation, and editing. I combined my stories and knowledge of the RE industry with those skills and started to provide educational RE content.

I wouldn't say zero, my first investment was a 1BR condo. Over 30 years ago, as a newlywed, my inlaws gave me and my wife $6000 to buy a car. It was 1987, I was 25, my wife was 20, we lived in the Bronx. I put $1000 down on a new Mazda 323 and the other $5000 as a down payment on the condo in Poughkeepsie NY. 

7 years later, I wound up buying a 21 family 5 story walk-up bldg in the Bronx. In these 7 years, I worked a full time job with RR and started a security systems company on my days off and evenings. I started with alarm installations which led to apt bldg intercom systems which allowed me to learn a lot about bldgs and tenanst in general.

It was especially helpful in getting to know the landlords and how they operated. I realized that there was NO reason that I couldn't also become a landlord. So being around the industry, I learned of a 21 unit bldg that was a possibility for me to buy. I had saved $50,000 in these past 7 years and borrowed another $25,000 from family members in order to close. 

I was very busy with the full time job and the intercom business, so there was also the time issue to consider. One night shortly before we closed, my wife said to "honey, you can teach me to manage the bldg so you can keep working your job and the business". I leaned over to her and whispered "that's a great idea, but who's going to teach me to manage it?" I really had no experience other than the 1BR condo that I owned and rented out, but I was confident that I could do it, and I did. One of the hardest things was having to learn and deal with the NYC rent regulations. 

Since I've retired from the RR (4 years ago), my focus has been solely multi family investments. Today I own and manage a total of 65 units in NY and TN and looking to grow over the next few years. I really just want enough properties to support a small staff, so I don't have to work.

@Hassan O. I grew up lower middle class in a loving family, joined the air national guard while still in high school for the college benefits, got my degree and became a pilot in the air national guard which has afforded me a lot of opportunities. Bought my first SFH in 2008 and relocated for a job in 2014 so I decided to rent that one out. I bought another SFH in 2015 and lived there until May of 2020 and then rented that one out. I had no idea what I was doing that whole time and got lucky with good long term tenants. I was always a saver so I had some money saved up and when I got married in 2019. We then sold my wife's house and made 100k profit. We combined our funds and bought several small multi-families and one STR this year. 2 duplexes, 2 triplexes, and the STR this year for a total of 13 doors. I plan to sell the first SFH for about 200k profit and tap into the significant equity I've accumulated in my second SFH in the spring and target a larger multi-family deal in 2022.

We've used leverage and money we've earned from our W-2's with no help from anyone else. I've studied this game and worked my butt off on top of my national guard and airline careers to get to this point and don't plan on slowing down any time soon. I can confidently say I started with nothing and got here on my own. I am very lucky that my wife and I share the same goals, but she trusts me to make it all happen. We had our first child in Aug 2020 and that's when my motivation began and it's become an obsession. We have another on the way due in Feb and they're my "why".

It can happen for anyone if you're committed. Start saving, start learning, and start hustling. There are no shortcuts and it's not easy, but it's definitely worth it.

I had about 40k (pretty much all of my savings since I was young) to start with. My partner and I found an off market deal that was a homerun and closed it. Technically, that wasn't from 0... but, after proving the concept, we've gotten 100% of the money we used to close the rest of our deals from investors and have invested 0 of our own money into the deals; and these have all been apartment deals between 24 and 62 units. Definitely possible if you're adding enough value by finding solid cashflowing deals and surrounding yourself with the right people!

When I started in real estate here in CT I was fresh out of college and had a day job that paid me $13 an hour at ESPN. Not sure if that qualifies as "starting at zero", but it felt like it at the time! Still in the business 16-17 years later w/ success and failures just like any other business. My path wasn't like a lot of others, but I have learned a lot of valuable lessons along the way.