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

95 Replies

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  • Member since 2020 · 339 posts · 356 votes
    5y

    Exciting story till I saw you sued your school to help buy a house .

  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    5y

    Congrats!

  • Investor · Cincinnati, OH · Member since 2018 · 304 posts · 185 votes
    5y

    Good Job and Congrats! Great to hear how you didn't let your commitments get in the way of investing by using power of attorney. Asking yourself HOW to get through something is key

  • Marco FelixPro Member
    Flipper/Rehabber · Santa Barbara, CA · Member since 2016 · 20 posts · 14 votes
    5y

    @Elijah Brown

    Incredible story, determination and drive!! Keep up the good work. I can’t wait for the book. This story was captivating and I can only imagine what the book will hold. Keep the stories coming, please.

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

    @Rich Solano 

    I try to invest up to 20% of the equity in my own deals, but I've also done a few deals where I contribute no equity.

    I've structured the equity in many different ways, including:

    -Taking a fixed % of the overall equity as my compensation
    -Management fees on AUM
    -Incentive promote over a preferred return hurdle with multiple tiers of reward (80/20, 70/30, 60/40, etc.)

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

    @Joy James

    I'm a bit confused by your question. The investors get whatever percentage they purchase in the deal. For example, if Joe contributes $10 of a $100 raise, he gets 10% of the equity.

  • Rental Property Investor · Phoenix, AZ · Member since 2015 · 68 posts · 235 votes
    5y
  • Rental Property Investor · Phoenix, AZ · Member since 2015 · 68 posts · 235 votes
    5y
  • Rental Property Investor · Phoenix, AZ · Member since 2015 · 68 posts · 235 votes
    5y
  • Rental Property Investor · Phoenix, AZ · Member since 2015 · 68 posts · 235 votes
    5y
  • Rental Property Investor · Phoenix, AZ · Member since 2015 · 68 posts · 235 votes
    5y
  • Yonah WeissPro Member
    Cost Segregation Expert and Investor · Lakewood, NJ · Member since 2017 · 1k+ posts · 1k+ votes
    5y

    Incredible story! Thanks for sharing @Elijah Brown!  Much continued success.

  • Investor Friendly Agent · Milwaukee, WI · Member since 2019 · 55 posts · 37 votes
    5y

    @Elijah Brown way to go on knowing why a deal ISN't for you! I struggle with that as an investor sometimes, when I want something outside of my buy box. I admire your focus! 

  • Philadelphia, PA · Member since 2017 · 824 posts · 1k+ votes
    5y

    First, thanks for your service. I used to work with a company that would commission the ROTC and Service Academy initial medical examinations (DoDMERB) and the respect that I have for you young brave people grew daily in that role.

    Congratulations to you and your team on your success. As an older guy (older than you, anyway), even though you are doing amazing things, at 24, I know what was on my mind...and I would just caution you to remain as grounded as possible. Other 24 year olds have tons of debt, might still be living at home, working hours they shouldn't for pay that's lower than dirt. You're well on your way of "having it all" -- so remember that living below your means is always the recipe for long-term success, conservative numbers on deals mean you might get surprised with a home run instead of being worried you're a singles hitter, and life comes fast...so always focus on family, respecting yourself and others, and treating your business like a business. Good luck moving forward!

  • Chris De CellePro Member
    Rental Property Investor · Los Angeles, CA · Member since 2016 · 41 posts · 28 votes
    5y

    @Elijah Brown what a great inspirational story! Loved learning every step and how you solved the problems along the way. Great JOB!

  • Realtor · Denver, CO · Member since 2020 · 259 posts · 153 votes
    5y

    @Elijah Brown congratulations man! Very inspiring and awesome story, keep it up!

  • Bethlehem, GA · Member since 2017 · 46 posts · 20 votes
    5y

    @Elijah Brown

    You answered my question! Thank you!

  • Member since 2021 · 16 posts · 4 votes
    5y

    @Elijah Brown

    Congratulations to you!! For starters like me, I am pumped to PUSH even more

  • Rental Property Investor · Dallas, TX · Member since 2019 · 14 posts · 4 votes
    5y

    @Elijah Brown congrats, love your story man - I also closed on my first deal while out in the field for IBOLC at Fort Benning last summer - can definitely relate to the excitement of sneaking a cell phone check to find out you are now officially a real estate investor!

  • Rental Property Investor · VT · Member since 2017 · 4 posts · 1 vote
    5y

    Go Vermont!  You've got grit...and no more shoveling : )

  • Vienna, VA · Member since 2017 · 12 posts · 1 vote
    5y

    Glad you started early and now the sky is the limit...Congratulations!

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

    That's awesome! I knew I couldn't be the only one LOL

  • Rental Property Investor · Macon, GA · Member since 2020 · 37 posts · 20 votes
    5y

    @Elijah Brown

    Great story. After 3 deals under my way, I’m looking for multi family to scale properly. But it’s lot to learn and will get there soon

  • Real Estate Broker · Huntsville, AL · Member since 2019 · 1k+ posts · 872 votes
    5y

    Incredible story! How would you recommend finding people to help you invest when you don't really have many people to turn to?

  • Realtor · Orlando, FL · Member since 2020 · 16 posts · 27 votes
    5y

    @Elijah Brown great story. I am a rookie investor and I am trying to get people to join me. I opened a LLC and I am looking to grow my business and find people that would like to invest with me.

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