From $200 to 70 Units at 24 Years Old

From $200 to 70 Units at 24 Years Old

Rental Property Investor · Phoenix, AZ · Member since 2015 · 68 posts · 235 votes

Hello,

My name is Elijah. I’d like to share my real estate story with you all:

At 17, I drove to Los Angeles from my small hometown in Vermont. I arrived with $200 in my bank account and all my belongings in an old Toyota. I had recently been accepted to the University of Southern California (USC) and I couldn’t wait.

School began, but my $30k tuition bill for the first semester never got paid. My parents had fallen on tough times and weren’t able to come up with the money. I needed a quick solution, so I joined the Reserve Officer Training Corps (ROTC) on my sister’s recommendation. This program allows students to train while in college, commission as a military officer upon graduation, and serve an eight year commitment in exchange for a full tuition scholarship and living stipends.

Late one night during my junior year, I stumbled upon the BiggerPockets YouTube channel. After spending the next two weeks watching every real estate video I could find, I was determined to purchase my first rental property.

By this time, I had been eating free meals at the school dining hall, saving my ROTC stipends, and working three part-time jobs (campus taxi driver at night, finance internship two days per week, and ice hockey referee on weekend mornings). I had saved up $20k.

I realized that $20k was not enough for a down payment and that I would not qualify for a loan. I called my best friend Larry from Vermont and my cousin Jake. I pitched them my crazy idea and sent them some of the YouTube videos that inspired me. Against all odds, they each agreed to invest $10k and co-sign the mortgage.

I was about to leave for Army camp when we found a perfect three bedroom house in Orlando for $140k. We had still not closed escrow the night before I was due to report, so I quickly signed over power of attorney to Larry. I had my phone turned off in my ruck sack while in training. If caught, I would be kicked out. Late one night, I snuck into the port-o-john and turned my phone on. Larry and Jake had successfully closed escrow on the house!

I knew I had to do it again. I was so hungry.

During my senior year of college, I won a small worker’s compensation lawsuit against USC from an accident I was victim of while a campus taxi driver. My $20k portion of the settlement, in addition to a USAA career-starter loan only available to ROTC cadets, meant I could buy another rental property.

After graduation, I had not secured a full time job, so I moved to Hawaii to live with my girlfriend’s parents while job hunting. I spent half of my time running a semi-legal Airbnb operation with a condo I rented month-to-month on Oahu. The other half I spent looking for a second rental property in Orlando. I spent very little time applying for jobs. After a few months of house searching, I tied up a property in Orlando under market value and immediately called Larry and Jake to gauge their interest. We closed on the second house in August 2018.

Shortly after, my employment recruiter, Ryan, finally called me about an asset management position at a commercial real estate firm in Irvine, California. I flew back to California from Hawaii and have been with the same company since then.

The great thing about working for a real estate investment company is that at least one of the other employees is a real estate investor. I networked like crazy and convinced a few of my co-workers to invest with me in two more Orlando houses. We closed on house number three in January 2019 and number four in June 2019.

I was having tremendous fun executing deals in every hour of my free time, but I quickly realized I needed to scale into multifamily. I sent out a Google survey to 25 of my co-workers and a few close friends. I asked if they would be interested in buying an apartment complex together and how much they would be willing to invest. I was able to raise $112.5k that week from ten incredibly trusting individuals.

I worked closely with my broker to find, negotiate, and close on a six-unit apartment complex in Orlando that I planned to renovate to increase rents. Finding a bridge lender and coordinating an SEC Regulation D offering was the most stressful experience of my life apart from Army training. I had to replace investors at the last second, and the lender who finally agreed to give me a chance was the 39th bank I applied to. There were also issues with the inspection, which required me to personally meet with the seller. We closed escrow in October 2019.

I spent the next 7 months evicting squatters and renovating each apartment one-by-one via my team of contractors and property managers in Florida. We refinanced the property in October 2020 with a 60% higher valuation than the purchase price.

After spending two years renting a Southern California apartment with my co-worker Kevin, I became obsessed with the house hacking strategy and began searching for a primary residence in Southern California that I could renovate and hack. I was convinced that COVID-19 would send home prices to the moon and also create enough buying opportunity with all the layoffs. My broker Thomas found the perfect four-bedroom fixer-upper in Orange County and I opened escrow with my 30% partner Patrick.

One week after opening escrow, I was called to active duty to complete a period of military training in Arizona. I quickly signed over power of attorney to Patrick and packed my bags. While in training, I closed escrow with only 5% down and convinced the lender to loan additional cash for a renovation. Patrick and I hired a contractor to execute while I was absent.

Arizona was a blast, and managing a full home renovation in additional to my other properties was certainly stressful; however, I couldn’t stop thinking about the next big deal.

Training was only Monday through Friday from 6AM to 5PM, so I spent nights and weekends hunting for deals in the Tucson market. After a few months, I found a decent five-unit apartment building on Loopnet and negotiated incredible seller-financing terms.

By this point, Larry and I had formed our own management LLC. Larry, who is now an accomplished CPA, has been an invaluable asset, especially when my other life commitments drag me in other directions. Larry helped us bring larger equity dollars to the table for the Tucson deal and we closed escrow in October 2020.

I returned from Arizona ready to get back to my girlfriend and begin renovating our Mercedes Sprinter van that we had purchased one weekend while I was in training. I had rented out all the bedrooms in my California house, so house hacking was no longer an option. The van would allow us to live rent and mortgage free, and also have the freedom to travel.

COVID-19 was getting bad in California, so my girlfriend insisted we move back in with her parents in Hawaii for a few months. I wanted to work on the van, but Hawaii didn’t seem like a bad proposition.

As soon as we arrived in Hawaii, I got the deal bug again. I decided to explore the Bigger Pockets forums, and stumbled upon Michael, who was syndicating a 54-unit value-add deal in Denver, CO. I asked Michael to send over the details and I reviewed them with Larry. No doubt, it was a killer deal. Larry and I agreed to join Michael in raising capital. That deal closed in February 2021.

I’m now at 70 units and looking to grow the portfolio exponentially. I’m also writing a book that I hope to release within the next few years. I’m more than happy to answer any questions and I’m always looking for a great conversation.

Elijah

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Most Popular Reply

Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
5y

put this guy on a podcast

See this reply in the discussion

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  • Joe HomsBusiness Member
    Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
    5y

    @Elijah Brown congrats on your success and hard work.  Keep it up.

    Good Investing...

  • Rental Property Investor · Phoenix, AZ · Member since 2015 · 68 posts · 235 votes
    5y

    @Joe Homs Thank you Joe! Remember that time we got Mexican food? Would love to do it again sometime. 

  • Joe HomsBusiness Member
    Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
    5y

    @Elijah Brown ready whenever you are...

  • Akron, OH · Member since 2015 · 178 posts · 189 votes
    5y

    "39th bank"

    That is what impressed me the most.

    Good going.

  • Rental Property Investor · Madison, AL · Member since 2019 · 487 posts · 658 votes
    5y

    @Elijah Brown

    Inspiring story. You were much smarter than me at a young age. The cadet starter loan was one of the worse financial mistakes I made. I paid it off, but I wish I could go back and buy a passive income-producing asset. 

    Sincerely, 

    Josh

  • Rental Property Investor · Los Angeles, CA · Member since 2018 · 23 posts · 14 votes
    5y

    @Elijah Brown Your story is very inspiring. Congrats on all of the work you've put into your investments!

  • Rental Property Investor · Phoenix, AZ · Member since 2015 · 68 posts · 235 votes
    5y

    @Account Closed Thank you Barry!

  • Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    5y

    put this guy on a podcast

  • Missoula, MT · Member since 2016 · 163 posts · 55 votes
    5y

    Now thats how you hustle.

    Very impressive, I’ve had too many deals fall through with financing on my end. 

    Convincing people to invest in real estate is something I’ve never been able to do. Bravo

  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    5y

    @Elijah Brown Congrats on your accomplishments and success. I think you need to focus more and make something of your life!

  • Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
    5y

    You were very determined and focused from a young age. I think you will have a long and successful career in real estate and your story is very inspiring. Well done!

  • Investor · Raleigh, NC · Member since 2019 · 433 posts · 743 votes
    5y

    Wow, what an inspiration. So awesome to hear someone around my age doing this. Keep it up and keep us updated!

  • Real Estate Agent · Winston Salem, NC · Member since 2014 · 486 posts · 303 votes
    5y

    @Elijah Brown great job! Awesome story.

  • Investor · Bremerton Washington · Member since 2020 · 3 posts · 3 votes
    5y

    @Elijah Brown Your story is truly inspiring. The amount of grit you clearly have to keep going helps me understand that amazing things can be done for those that are hungry. Thank you for sharing.

  • Rental Property Investor · Jacksonville, FL · Member since 2015 · 343 posts · 142 votes
    5y

    @Elijah Brown Mehn, you just lit some fire under my a$$ Bro! Good Job in using your loan and monies wisely. I like the hunger in YOU! You inspired US all that we could be doing MORE!

  • Rental Property Investor · Charleston, SC · Member since 2021 · 13 posts · 7 votes
    5y

    @Elijah Brown

    Love the story ! What kind of ROI did you receive on the apartment complex with that many investors ?

  • Rental Property Investor · Phoenix, AZ · Member since 2015 · 68 posts · 235 votes
    5y

    @Preston Davie We spent on average $10k/unit for a total of $60k in renovation costs. Those renovations increased the appraised value of the property from $340k to $530k. The simple project ROI was 217% unlevered; however, we did use a bridge loan, so the actual levered ROI on that project was much higher. Considering that we have not sold yet, I cannot report an IRR or an equity multiple. However, in terms of cash flow, we bring in $5,640 per month in income and our total initial capital outlay was only $112.5k.

  • Realtor · Salt Lake City, UT · Member since 2020 · 26 posts · 23 votes
    5y

    @Elijah Brown that’s awesome! And very well written post!

    I’m in the process of raising money for a syndication, which lenders did you use that finically said “yes”?

  • Rental Property Investor · Charleston, SC · Member since 2021 · 13 posts · 7 votes
    5y

    @Elijah Brown very cool, something I’m looking forward to getting into in the future ! I’m currently in the middle of convincing two friends to buy a property as well...we’re making progress. Now not to ask too many questions, but did you come into any issues buying that first property with your friends?

  • Realtor · Salt Lake City, UT · Member since 2020 · 26 posts · 23 votes
    5y

    @Kade Lucero  finally*

  • Rental Property Investor · Beaufort, SC · Member since 2020 · 119 posts · 98 votes
    5y

    @Elijah Brown

    Fantastic, you killed it and you have showed me that my goals are possible. I’m a 19 year old enlisted Marine and just bought my first House hack last week. It’s been stressful balancing everything, but your story showed me there is a lot of light at the end of the tunnel. Thank you for sharing!

  • Rental Property Investor · Phoenix, AZ · Member since 2015 · 68 posts · 235 votes
    5y

    @Kade Lucero I got the bridge loan from Patch of Land. It was an 80% LTC at 7.99% interest only for 1 year. I refinanced with Mainstreet Community Bank of Florida with a 65% LTV at 4.75%.

    @Preston Davie Yes, lots of issues buying the first property. We were very new to the process, so we asked a lot of questions. Our real estate agent and property manager were very angry with some of these questions. Also, I didn't mention it, but Jake and Larry both jumped through multiple rings of fire to close the transaction while I was away with the Army.

    @Jabbar Adesada Good luck on your journey and congrats on the house hack! Let me know if you ever get stationed at Camp Pendleton. I'm there often.

  • Rental Property Investor · Beaufort, SC · Member since 2020 · 119 posts · 98 votes
    5y

    Thanks! I will definitely reach out next time I go over there.

    \

  • Central, MN · Member since 2015 · 148 posts · 184 votes
    5y

    Kudos on your hustle.... also, interesting to note you had to take the leap of faith multiple times and turn over control to someone else- many would not be able to do that.  Congrats on your success.

  • Jordan StenholmPro Member
    Specialist · Tampa Bay Area, FL · Member since 2020 · 9 posts · 8 votes
    5y

    @Elijah Brown WOW. Thank you for sharing your incredible journey thus far Elijah! I really admire your determination and grit to get deals done. It’s very motivating to see, especially in how you’ve been able to partner with many out of state players to make it happen. Plus Van Life is the dream!

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