From Bankruptcy to 1,000 Units (Part 3 - How to Build an Empire)

50 Replies

Here’s Part 1

Here’s Part 2

I will answer the question: how I went from 1 house and an 8-unit building to over 1,000 apartment units and more importantly, what I learned along the way. I share my story NOT to brag because my success took a lot of hard work and honestly, a little bit of luck. My hope is that some of you will learn from my story, or at least be inspired to persevere and endure with real estate investing specially when times are tough.

Here’s the last part of my story.

-----------------------------------------

28-Units in a War Zone

After my 8-unit acquisition, I did a couple of smaller deals. One of them is a 2-family apartment building I bought from the same “tax credit” group (see part 2). The next bigger deal came and as all deals, it appeared as “work”.

It was a 28-unit property - well it’s actually 4 properties in one block in Over the Rhine. At that time, that particular part of OTR was an “F” area (war zone) but it was gentrifying. The problem with the property was that out of 28 units, only 4 units were occupied. It needed work. The owner of the property wanted me to fix the units and he told me that if I want the property, I could buy it.

He told me was that he didn’t have any money personally to fix the units. Good thing though that he was smart enough to put aside money in reserves from the property when it was still performing. Anyway to make the long story short, I used $16,000 in reserves to fix some of the units. I did the work myself. Talking about being hands-on: I was literally putting my sweat into this property.

How to Turn a Problem Property into Gold

Now, I realized early on that leasing the property was going to be a problem if I marketed it and get tenants the conventional way. So I spoke again to the lady who worked for an agency which leased my 8-unit building (see Part 2). However, she told me her agency does not have any money in their budget. But I didn’t let that discouraged me. I spoke with other agencies - like agencies for AIDS, for the homeless, section 8, etc. I found an agency (I am keeping this one close to the vest as this is a source of competitive advantage for me) that was willing to provide subsidies to the tenants. So as soon as I fixed a unit, I lease it. And I did it several times until I get the building from 14% occupancy to 85% occupancy.

The owner of the building asked me again if I wanted the property and I told him yes. I knew that even with the property now 85% occupied that he still wanted to sell. Managing a property in an “F” area is no joke. It’s a full time job and it’s never passive. It takes a LOT of work. We agreed on a price of $140,000 - a mere $5,000 per door!

So I called my private lender. He lent me $170,000 and I kept $30,000 as reserves. The deal was so good that all it took was 4 tenants to pay me their rent and I was able to pay the debt service! After all expenses, my cashflow from just that one property is $30,000/year.

Cashing Out and Trading Up

One of the downsides though of owning a property in a F area is that it took so much time. I couldn’t do anything else. Somehow, I managed to do 2-3 flips per year allowing me to make a total income of about $75,000/year.

The word spread around in Cincinnati that I am THE guy who could stomach and manage these problem properties in war zone areas. So investors left and right were begging me to manage their buildings. I hired and trained some people and together were able manage about 150 units for other investors and my personal income increased to about $100,000/year.

Remember the 28-unit building in Over the Rhine? The previous owner of that building told me that he would buy the building back from me after a few years. Four years have passed since I took over and he was true to his word - he made me an offer I couldn’t refuse and we didn’t even negotiate. My sales price - $280,000 is double what I paid for!

Some of you might ask why would I sell a cash machine like that. There were 2 reasons.

  1. I wanted to grow and I needed to trade up. I need a bigger property in a better area so I can do MORE deals; and
  2. 2008 happened and I knew I have to have a lot of cash in my war chest to be able to build my empire

It was a win for the previous owner-seller-turned-buyer again of that 28-unit property. Because OTR was gentrifying, I am sure he would be able to sell that building for maybe even double what he bought it for.

Then 2008 Happened!

Anyway, I love 2008-2009. There were so many deals - it was a crazy time and there were some crazy deals that were crazy profitable! (I know - I said crazy three times in one sentence!)

One crazy deal was this desperate seller of a mansion. In 2007, this house appraised for over $600,000. He begged me to buy it for $300,000. I told him “NO”.

He then went back and told me he would pay me to take this house. He offered me $100,000 cash at closing! I told him “NO”.

Then he told me he would add 2 small houses on top of the deal. I finally said “YES”.

These 2 houses though needed about $30,000 to $40,000 in work. In just 60 days after we did the work, we sold these 2 houses and bought 4 houses which we rented and generated $2,000/month in cashflow. I also sold that $300,000 house for pretty much what I paid for but the real money came from cash at closing and those 2 free houses!

Then, I used that cash to buy non-performing notes. Ohhh man, those were really good times! I bought notes and sold them and made a whopping $300,000 profit! Wow.

Growth Spurts

I could talk more and more about the many deals I did but I won’t bore you with all the details. I just like to mention that my growth as a real estate investor happened slowly at first and then like a 14 year old guy, my portfolio had some growth spurts.

One growth spurt happened after I bought the 28-units. Another growth spurt happened when I realized I could hire property managers and teach them my system for managing these problem properties in war zones (so now I can scale).

Another growth spurt happened when I sold the 28 units and I met my business partner Nate. He was a lot better than me at construction. His expertise with construction allowed us to get into commercial properties and have ownership interests in them even when we don’t put our own money in those deals!

Still another growth spurt happened with a 48-unit property (and I talked about this property also here on Biggerpockets). I made over $1 MILLION profit on that building {here's the LINK to that}.

And my latest growth spurt happened when I focused on acquiring hotels and doing developments.

And then I woke up one day and I realized I have acquired over 1,000 apartment & hotel units. I couldn’t believe it.

What I Learned When Building an Empire

In 2016, I bought a brand new Escalade for cash simply because I can. This was my vision back in my “Four flats” period of my life (see Part 1). My vision became my reality!

I also bought 2 Rolex watches - one for me and one for my brother-in-law...also for cash. My partner Nate bought a Bentley for him and a Bentley for his wife (I try to be less flashy than that). The passive income we receive from our properties more than pay for these luxuries and once in a while you got to reward yourself.

Anyway, here are three things I learned that I want to share with you if you want to build a real estate empire:

  1. You have to let go of the things you’re not good at and focus on the few things you are good at. In my case, I became good at acquiring properties and getting these properties leased quickly but I became the best in the world at leading people so they know how to manage properties and turning these properties into money machines
  2. To scale and to grow, you got to get outside of your comfort zone and be uncomfortable. The 28-unit became comfortable. Doing things on my own and succeeding with war zone properties became comfortable. SO I sold my 28-units. I found and trained other people manage properties. I bought notes. I got into better areas. I even sold a 48-unit building, not just to make a $1Million but it allowed me to scale up. I got into developments. Most people don’t want to feel uncomfortable. To me, when you feel comfortable, that is NOT good - that means you’re not growing and if you’re not growing, you’re dying!
  3. Your empire is only as good as your team and your leadership abilities. Give me a real estate portfolio that is growing and I am 100% sure, a leader is behind it. So work on your leadership skills DAILY and you will meet the right people whom you will lead to grow your portfolio.

Now that I’ve shared my story, I like to hear from you.

Any insights you’ve learned from my story?

Any of you in the “Four Flats” period of life?

Any of you struggling to grow because you’ve become comfortable?

Were you inspired to do something about it? What will you do differently after reading my story?

Let’s hear it.

I love your story about managing in a war zone. Do you have any tips for choosing the right property manager for an up and coming area that is more like D class? Or analyzing these types of properties to make sure you are anticipating for the inevitable evictions and vacancies? 

Originally posted by @Matthew Irish-Jones :

@Michael Ealy great story and congrats.  Lot of people on BP hoping to follow in your footsteps.  Where are you currently developing?  Are you doing anything with opportunity zones?

 Thanks Matthew.

I am currently developing in Cincinnati and other midwest cities.

I am looking into OZ as well but that's not my main focus when evaluating where to develop.

Originally posted by @Allyssa McCleery :

I love your story about managing in a war zone. Do you have any tips for choosing the right property manager for an up and coming area that is more like D class? Or analyzing these types of properties to make sure you are anticipating for the inevitable evictions and vacancies? 

Allyssa,

Visit the properties that the PM manages (from the outside - both during the day and at night: but of course, use common sense to protect yourself). You want to see no illegal activity at night (prostitution or drug dealing) and the property is well maintained (no broken windows or no trash in the front).

When I analyze a D or F property, I factor in 10-15% vacancy, 10-15% for property management and 10-20% repairs and maintenance. If the property still cashflows even under those scenarios, then buying that building in a D area might make sense.

@Michael Ealy

Your story is really what I needed to read tonight. We can all learn from your success and appreciate everything you shared. Thanks for taking the time to share.

@Michael Ealy

Thank you so much for writing up your story! As someone who invests in C-/D areas, it’s inspiring to hear someone who made it big by initially specializing in these types of units. Most folks on BP say to stay away from these properties at all costs, but I’ve always thought with the right system in place, it could be done. And you are the prime example of that!

It’s awesome that you’ve been able to do all of your deals without having to portion off equity to your investors.

And looking to other government agencies for subsidies outside of section 8 was genius. I’ve never thought of that before, and could see myself using that going forward.

Originally posted by @Kira Zachery :

Wow this post was inspiring! I'm new to real estate. Learning everything I can!!

 Kira, thanks. I am glad it inspired you. Yes, learn as much as you can but the real way you will learn is when you put into action that which you have read (from a book) or heard (from a podcast or seminar).

Originally posted by @Frank Geiger :

@Michael Ealy holy cow man. You're a monster! Way to learn from your mistakes and take massive action in your life!

Thanks Frank!

I did what I had to just to survive and then keep taking action until my dream becomes a reality.

Originally posted by @Rafael W. :

Reading this made my day. What a journey man. Amazing.

Rafael,

I am glad it inspired you and made your day.

You can make your life amazing by putting in the action you need to reach your goals.

Love the journey, learn from your missteps and always keep moving forward :)

Originally posted by @Ken T. :

@Michael Ealy

Your story is really what I needed to read tonight. We can all learn from your success and appreciate everything you shared. Thanks for taking the time to share.

Ken,

You're very welcome.

I am glad you appreciate what I've shared.

Keep fighting to make your dreams a reality!

Originally posted by @Michael Frasier :

@Michael Ealy

Your story is pretty amazing and a great read. I seriously just had a big smile on my face the whole time. I'm brand new but this story definitely inspired me.

 Michael,

Nice name :)

I am glad it made you smile and my story inspired you.

Nothing is impossible if you have faith and put in the action.

Originally posted by @Taylor Chiu :

@Michael Ealy

Thank you so much for writing up your story! As someone who invests in C-/D areas, it’s inspiring to hear someone who made it big by initially specializing in these types of units. Most folks on BP say to stay away from these properties at all costs, but I’ve always thought with the right system in place, it could be done. And you are the prime example of that!

It’s awesome that you’ve been able to do all of your deals without having to portion off equity to your investors.

And looking to other government agencies for subsidies outside of section 8 was genius. I’ve never thought of that before, and could see myself using that going forward.

Taylor,

You're very welcome. And I am glad not many investors can do what you and I are willing to do :)

But it's not easy and it's risky specially for a newbie investor.

Well, for the bigger deals I do give up some equity. In my earlier deals I guess I was lucky that they were backed by private lenders.

I love the government programs you can tap into that provides housing. They encourage us landlords to keep investing in the community and in exchange, we provide affordable housing to the masses.

Originally posted by @Mario Mormile :

@Michael Ealy what a journey! I took a few financial hits last year. One word kept appearing as I read this: PERSEVERANCE. You got up every time that you got knocked down. Thank you for sharing this with us. 

 Mario,

You got that right! Perseverance is the key. And closely related to that is CONSISTENCY. 

You build a palace one brick at a time.


Originally posted by @Michael Ealy :
Originally posted by @Allyssa McCleery:

I love your story about managing in a war zone. Do you have any tips for choosing the right property manager for an up and coming area that is more like D class? Or analyzing these types of properties to make sure you are anticipating for the inevitable evictions and vacancies? 

Allyssa,

Visit the properties that the PM manages (from the outside - both during the day and at night: but of course, use common sense to protect yourself). You want to see no illegal activity at night (prostitution or drug dealing) and the property is well maintained (no broken windows or no trash in the front).

When I analyze a D or F property, I factor in 10-15% vacancy, 10-15% for property management and 10-20% repairs and maintenance. If the property still cashflows even under those scenarios, then buying that building in a D area might make sense.

Thank you that makes a lot of sense!

Originally posted by @Michael Ealy :

Here’s Part 1

Here’s Part 2

I will answer the question: how I went from 1 house and an 8-unit building to over 1,000 apartment units and more importantly, what I learned along the way. I share my story NOT to brag because my success took a lot of hard work and honestly, a little bit of luck. My hope is that some of you will learn from my story, or at least be inspired to persevere and endure with real estate investing specially when times are tough.

Here’s the last part of my story.

-----------------------------------------

28-Units in a War Zone

After my 8-unit acquisition, I did a couple of smaller deals. One of them is a 2-family apartment building I bought from the same “tax credit” group (see part 2). The next bigger deal came and as all deals, it appeared as “work”.

It was a 28-unit property - well it’s actually 4 properties in one block in Over the Rhine. At that time, that particular part of OTR was an “F” area (war zone) but it was gentrifying. The problem with the property was that out of 28 units, only 4 units were occupied. It needed work. The owner of the property wanted me to fix the units and he told me that if I want the property, I could buy it.

He told me was that he didn’t have any money personally to fix the units. Good thing though that he was smart enough to put aside money in reserves from the property when it was still performing. Anyway to make the long story short, I used $16,000 in reserves to fix some of the units. I did the work myself. Talking about being hands-on: I was literally putting my sweat into this property.

How to Turn a Problem Property into Gold

Now, I realized early on that leasing the property was going to be a problem if I marketed it and get tenants the conventional way. So I spoke again to the lady who worked for an agency which leased my 8-unit building (see Part 2). However, she told me her agency does not have any money in their budget. But I didn’t let that discouraged me. I spoke with other agencies - like agencies for AIDS, for the homeless, section 8, etc. I found an agency (I am keeping this one close to the vest as this is a source of competitive advantage for me) that was willing to provide subsidies to the tenants. So as soon as I fixed a unit, I lease it. And I did it several times until I get the building from 14% occupancy to 85% occupancy.

The owner of the building asked me again if I wanted the property and I told him yes. I knew that even with the property now 85% occupied that he still wanted to sell. Managing a property in an “F” area is no joke. It’s a full time job and it’s never passive. It takes a LOT of work. We agreed on a price of $140,000 - a mere $5,000 per door!

So I called my private lender. He lent me $170,000 and I kept $30,000 as reserves. The deal was so good that all it took was 4 tenants to pay me their rent and I was able to pay the debt service! After all expenses, my cashflow from just that one property is $30,000/year.

Cashing Out and Trading Up

One of the downsides though of owning a property in a F area is that it took so much time. I couldn’t do anything else. Somehow, I managed to do 2-3 flips per year allowing me to make a total income of about $75,000/year.

The word spread around in Cincinnati that I am THE guy who could stomach and manage these problem properties in war zone areas. So investors left and right were begging me to manage their buildings. I hired and trained some people and together were able manage about 150 units for other investors and my personal income increased to about $100,000/year.

Remember the 28-unit building in Over the Rhine? The previous owner of that building told me that he would buy the building back from me after a few years. Four years have passed since I took over and he was true to his word - he made me an offer I couldn’t refuse and we didn’t even negotiate. My sales price - $280,000 is double what I paid for!

Some of you might ask why would I sell a cash machine like that. There were 2 reasons.

  1. I wanted to grow and I needed to trade up. I need a bigger property in a better area so I can do MORE deals; and
  2. 2008 happened and I knew I have to have a lot of cash in my war chest to be able to build my empire

It was a win for the previous owner-seller-turned-buyer again of that 28-unit property. Because OTR was gentrifying, I am sure he would be able to sell that building for maybe even double what he bought it for.

Then 2008 Happened!

Anyway, I love 2008-2009. There were so many deals - it was a crazy time and there were some crazy deals that were crazy profitable! (I know - I said crazy three times in one sentence!)

One crazy deal was this desperate seller of a mansion. In 2007, this house appraised for over $600,000. He begged me to buy it for $300,000. I told him “NO”.

He then went back and told me he would pay me to take this house. He offered me $100,000 cash at closing! I told him “NO”.

Then he told me he would add 2 small houses on top of the deal. I finally said “YES”.

These 2 houses though needed about $30,000 to $40,000 in work. In just 60 days after we did the work, we sold these 2 houses and bought 4 houses which we rented and generated $2,000/month in cashflow. I also sold that $300,000 house for pretty much what I paid for but the real money came from cash at closing and those 2 free houses!

Then, I used that cash to buy non-performing notes. Ohhh man, those were really good times! I bought notes and sold them and made a whopping $300,000 profit! Wow.

Growth Spurts

I could talk more and more about the many deals I did but I won’t bore you with all the details. I just like to mention that my growth as a real estate investor happened slowly at first and then like a 14 year old guy, my portfolio had some growth spurts.

One growth spurt happened after I bought the 28-units. Another growth spurt happened when I realized I could hire property managers and teach them my system for managing these problem properties in war zones (so now I can scale).

Another growth spurt happened when I sold the 28 units and I met my business partner Nate. He was a lot better than me at construction. His expertise with construction allowed us to get into commercial properties and have ownership interests in them even when we don’t put our own money in those deals!

Still another growth spurt happened with a 48-unit property (and I talked about this property also here on Biggerpockets). I made over $1 MILLION profit on that building {here's the LINK to that}.

And my latest growth spurt happened when I focused on acquiring hotels and doing developments.

And then I woke up one day and I realized I have acquired over 1,000 apartment & hotel units. I couldn’t believe it.

What I Learned When Building an Empire

In 2016, I bought a brand new Escalade for cash simply because I can. This was my vision back in my “Four flats” period of my life (see Part 1). My vision became my reality!

I also bought 2 Rolex watches - one for me and one for my brother-in-law...also for cash. My partner Nate bought a Bentley for him and a Bentley for his wife (I try to be less flashy than that). The passive income we receive from our properties more than pay for these luxuries and once in a while you got to reward yourself.

Anyway, here are three things I learned that I want to share with you if you want to build a real estate empire:

  1. You have to let go of the things you’re not good at and focus on the few things you are good at. In my case, I became good at acquiring properties and getting these properties leased quickly but I became the best in the world at leading people so they know how to manage properties and turning these properties into money machines
  2. To scale and to grow, you got to get outside of your comfort zone and be uncomfortable. The 28-unit became comfortable. Doing things on my own and succeeding with war zone properties became comfortable. SO I sold my 28-units. I found and trained other people manage properties. I bought notes. I got into better areas. I even sold a 48-unit building, not just to make a $1Million but it allowed me to scale up. I got into developments. Most people don’t want to feel uncomfortable. To me, when you feel comfortable, that is NOT good - that means you’re not growing and if you’re not growing, you’re dying!
  3. Your empire is only as good as your team and your leadership abilities. Give me a real estate portfolio that is growing and I am 100% sure, a leader is behind it. So work on your leadership skills DAILY and you will meet the right people whom you will lead to grow your portfolio.

Now that I’ve shared my story, I like to hear from you.

Any insights you’ve learned from my story?

Any of you in the “Four Flats” period of life?

Any of you struggling to grow because you’ve become comfortable?

Were you inspired to do something about it? What will you do differently after reading my story?

Let’s hear it.

Your story is awesome! I was hanging on every word you wrote. Like you I visualized where I want to be in the future and have worked towards that goal. I recently decided to shift ALL of my focus into real estate and your story reaffirmed that I made a good decision. The hard work, focus, determination, and resilience demonstrated for you to succeed are the attributes that give me the faith to know that I will make it too. Taking action is the name of the game and I'm willing to go ALL IN to bring my dreams to fruition. 

You have lived the ULTIMATE comeback story. Thank you for sharing because I'm going to use the inspiration I feel to continually fuel my gradual ascent to financial freedom and wealth.

Originally posted by @Charles Salter Iii :
Originally posted by @Michael Ealy:

Here’s Part 1

Here’s Part 2

I will answer the question: how I went from 1 house and an 8-unit building to over 1,000 apartment units and more importantly, what I learned along the way. I share my story NOT to brag because my success took a lot of hard work and honestly, a little bit of luck. My hope is that some of you will learn from my story, or at least be inspired to persevere and endure with real estate investing specially when times are tough.

Here’s the last part of my story.

-----------------------------------------

28-Units in a War Zone

After my 8-unit acquisition, I did a couple of smaller deals. One of them is a 2-family apartment building I bought from the same “tax credit” group (see part 2). The next bigger deal came and as all deals, it appeared as “work”.

It was a 28-unit property - well it’s actually 4 properties in one block in Over the Rhine. At that time, that particular part of OTR was an “F” area (war zone) but it was gentrifying. The problem with the property was that out of 28 units, only 4 units were occupied. It needed work. The owner of the property wanted me to fix the units and he told me that if I want the property, I could buy it.

He told me was that he didn’t have any money personally to fix the units. Good thing though that he was smart enough to put aside money in reserves from the property when it was still performing. Anyway to make the long story short, I used $16,000 in reserves to fix some of the units. I did the work myself. Talking about being hands-on: I was literally putting my sweat into this property.

How to Turn a Problem Property into Gold

Now, I realized early on that leasing the property was going to be a problem if I marketed it and get tenants the conventional way. So I spoke again to the lady who worked for an agency which leased my 8-unit building (see Part 2). However, she told me her agency does not have any money in their budget. But I didn’t let that discouraged me. I spoke with other agencies - like agencies for AIDS, for the homeless, section 8, etc. I found an agency (I am keeping this one close to the vest as this is a source of competitive advantage for me) that was willing to provide subsidies to the tenants. So as soon as I fixed a unit, I lease it. And I did it several times until I get the building from 14% occupancy to 85% occupancy.

The owner of the building asked me again if I wanted the property and I told him yes. I knew that even with the property now 85% occupied that he still wanted to sell. Managing a property in an “F” area is no joke. It’s a full time job and it’s never passive. It takes a LOT of work. We agreed on a price of $140,000 - a mere $5,000 per door!

So I called my private lender. He lent me $170,000 and I kept $30,000 as reserves. The deal was so good that all it took was 4 tenants to pay me their rent and I was able to pay the debt service! After all expenses, my cashflow from just that one property is $30,000/year.

Cashing Out and Trading Up

One of the downsides though of owning a property in a F area is that it took so much time. I couldn’t do anything else. Somehow, I managed to do 2-3 flips per year allowing me to make a total income of about $75,000/year.

The word spread around in Cincinnati that I am THE guy who could stomach and manage these problem properties in war zone areas. So investors left and right were begging me to manage their buildings. I hired and trained some people and together were able manage about 150 units for other investors and my personal income increased to about $100,000/year.

Remember the 28-unit building in Over the Rhine? The previous owner of that building told me that he would buy the building back from me after a few years. Four years have passed since I took over and he was true to his word - he made me an offer I couldn’t refuse and we didn’t even negotiate. My sales price - $280,000 is double what I paid for!

Some of you might ask why would I sell a cash machine like that. There were 2 reasons.

  1. I wanted to grow and I needed to trade up. I need a bigger property in a better area so I can do MORE deals; and
  2. 2008 happened and I knew I have to have a lot of cash in my war chest to be able to build my empire

It was a win for the previous owner-seller-turned-buyer again of that 28-unit property. Because OTR was gentrifying, I am sure he would be able to sell that building for maybe even double what he bought it for.

Then 2008 Happened!

Anyway, I love 2008-2009. There were so many deals - it was a crazy time and there were some crazy deals that were crazy profitable! (I know - I said crazy three times in one sentence!)

One crazy deal was this desperate seller of a mansion. In 2007, this house appraised for over $600,000. He begged me to buy it for $300,000. I told him “NO”.

He then went back and told me he would pay me to take this house. He offered me $100,000 cash at closing! I told him “NO”.

Then he told me he would add 2 small houses on top of the deal. I finally said “YES”.

These 2 houses though needed about $30,000 to $40,000 in work. In just 60 days after we did the work, we sold these 2 houses and bought 4 houses which we rented and generated $2,000/month in cashflow. I also sold that $300,000 house for pretty much what I paid for but the real money came from cash at closing and those 2 free houses!

Then, I used that cash to buy non-performing notes. Ohhh man, those were really good times! I bought notes and sold them and made a whopping $300,000 profit! Wow.

Growth Spurts

I could talk more and more about the many deals I did but I won’t bore you with all the details. I just like to mention that my growth as a real estate investor happened slowly at first and then like a 14 year old guy, my portfolio had some growth spurts.

One growth spurt happened after I bought the 28-units. Another growth spurt happened when I realized I could hire property managers and teach them my system for managing these problem properties in war zones (so now I can scale).

Another growth spurt happened when I sold the 28 units and I met my business partner Nate. He was a lot better than me at construction. His expertise with construction allowed us to get into commercial properties and have ownership interests in them even when we don’t put our own money in those deals!

Still another growth spurt happened with a 48-unit property (and I talked about this property also here on Biggerpockets). I made over $1 MILLION profit on that building {here's the LINK to that}.

And my latest growth spurt happened when I focused on acquiring hotels and doing developments.

And then I woke up one day and I realized I have acquired over 1,000 apartment & hotel units. I couldn’t believe it.

What I Learned When Building an Empire

In 2016, I bought a brand new Escalade for cash simply because I can. This was my vision back in my “Four flats” period of my life (see Part 1). My vision became my reality!

I also bought 2 Rolex watches - one for me and one for my brother-in-law...also for cash. My partner Nate bought a Bentley for him and a Bentley for his wife (I try to be less flashy than that). The passive income we receive from our properties more than pay for these luxuries and once in a while you got to reward yourself.

Anyway, here are three things I learned that I want to share with you if you want to build a real estate empire:

  1. You have to let go of the things you’re not good at and focus on the few things you are good at. In my case, I became good at acquiring properties and getting these properties leased quickly but I became the best in the world at leading people so they know how to manage properties and turning these properties into money machines
  2. To scale and to grow, you got to get outside of your comfort zone and be uncomfortable. The 28-unit became comfortable. Doing things on my own and succeeding with war zone properties became comfortable. SO I sold my 28-units. I found and trained other people manage properties. I bought notes. I got into better areas. I even sold a 48-unit building, not just to make a $1Million but it allowed me to scale up. I got into developments. Most people don’t want to feel uncomfortable. To me, when you feel comfortable, that is NOT good - that means you’re not growing and if you’re not growing, you’re dying!
  3. Your empire is only as good as your team and your leadership abilities. Give me a real estate portfolio that is growing and I am 100% sure, a leader is behind it. So work on your leadership skills DAILY and you will meet the right people whom you will lead to grow your portfolio.

Now that I’ve shared my story, I like to hear from you.

Any insights you’ve learned from my story?

Any of you in the “Four Flats” period of life?

Any of you struggling to grow because you’ve become comfortable?

Were you inspired to do something about it? What will you do differently after reading my story?

Let’s hear it.

Your story is awesome! I was hanging on every word you wrote. Like you I visualized where I want to be in the future and have worked towards that goal. I recently decided to shift ALL of my focus into real estate and your story reaffirmed that I made a good decision. The hard work, focus, determination, and resilience demonstrated for you to succeed are the attributes that give me the faith to know that I will make it too. Taking action is the name of the game and I'm willing to go ALL IN to bring my dreams to fruition. 

You have lived the ULTIMATE comeback story. Thank you for sharing because I'm going to use the inspiration I feel to continually fuel my gradual ascent to financial freedom and wealth.

 Charles,

Thanks. You are correct in going "ALL IN". If you're not all-in and you have a back up plan, you can't really achieve greatness.

Thank you for taking the time to share your story! It's always nice to see stories that share the downfalls AND successes that can occur in this business. Your story is proof that with persistence and determination your dreams can become a reality!

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