Investor · San Diego, CA · Member since 2013 · 19 posts · 16 votes
Hi everyone!
I am new to the Biggerpockets community, though have listened to Josh's and Brandon's podcasts for over a year now, and been more of a passive reader of the wealth of information on BP. My wife and I currently own single family rentals in Chandler, AZ and San Antonio, TX, and a 4-plex in San Diego. Our goal is to achieve financial freedom as quickly and as safely as we can. We have 2 young kids (ages 6 and 3), and another goal is to teach our kids the real estate business, to give them an opportunity to see the power of passive income and the opportunities it can create in their lives. Looking forward to getting to know many of you! Brian W
My path was start with single family condos in San Diego that I purchased in 2011 and 2012 for less than 1/2 of what they were selling for during the peak. Dramatic appreciation happened from 2013 to 2015 and we started 1031 exchanging those condos for 8, 10, 12, and a 15 unit complex in Northeast Ohio. I basically traded in 4 condos cash flowing at about $6,000.00 each per year on 30 year loans for $15-$20,000 cash flow for each Apartment complex. The power of the 1031 exchange is amazing!!! I read Multifamily Millions by David Lindahl, listened religiously to Lifestyles Unlimited Inc. (LUI) podcasts on TUNEIN RADIO for 2 years and attended LUI’s 2 day seminar in Houston, Texas. On Day 2 of that seminar, I knew that eventually I will have Three or four 300-400 unit Apartment complexes. Right now our Tax deferred cash flow sits at $120,000 per year and in 10 years time, I will be sitting at $1,000,000.00 tax deferred cash flow coming in yearly.
I still have 4 pricey rental condos here in San Diego that I expect to sell and 1031 exchange this summer when the tenants’ leases expire. Plus, I am currently fully executing my first purchase agreement for an Equity Partnership with friends. We are purchasing a 21 unit and my total doors will now be up to 78 front doors, with the 8 single family we also own in the same state as our apartment complexes. In the equity partnership, I will be putting in 10% of the down payment and receive 20% of the cash flow and 20% of the equity for my connections, running the entire thing as the managing partner. The investors will be contributing 90% of the down payment.
If a lowly paid teacher earning a combined family income, before taxes of $80,000 can do this. Anyone can!!
Brian feel free to reach out to me if you need some advice etc...
My path was start with single family condos in San Diego that I purchased in 2011 and 2012 for less than 1/2 of what they were selling for during the peak. Dramatic appreciation happened from 2013 to 2015 and we started 1031 exchanging those condos for 8, 10, 12, and a 15 unit complex in Northeast Ohio. I basically traded in 4 condos cash flowing at about $6,000.00 each per year on 30 year loans for $15-$20,000 cash flow for each Apartment complex. The power of the 1031 exchange is amazing!!! I read Multifamily Millions by David Lindahl, listened religiously to Lifestyles Unlimited Inc. (LUI) podcasts on TUNEIN RADIO for 2 years and attended LUI’s 2 day seminar in Houston, Texas. On Day 2 of that seminar, I knew that eventually I will have Three or four 300-400 unit Apartment complexes. Right now our Tax deferred cash flow sits at $120,000 per year and in 10 years time, I will be sitting at $1,000,000.00 tax deferred cash flow coming in yearly.
I still have 4 pricey rental condos here in San Diego that I expect to sell and 1031 exchange this summer when the tenants’ leases expire. Plus, I am currently fully executing my first purchase agreement for an Equity Partnership with friends. We are purchasing a 21 unit and my total doors will now be up to 78 front doors, with the 8 single family we also own in the same state as our apartment complexes. In the equity partnership, I will be putting in 10% of the down payment and receive 20% of the cash flow and 20% of the equity for my connections, running the entire thing as the managing partner. The investors will be contributing 90% of the down payment.
If a lowly paid teacher earning a combined family income, before taxes of $80,000 can do this. Anyone can!!
Brian feel free to reach out to me if you need some advice etc...
Swanny- that is phenomenal! You definitely had the foresight to strike in San Diego at the right time. I really like your idea of transitioning out of your appreciated properties to lower cost, higher cash flowing areas. We've been trying to do that for a little while (but on a much lower scale!) - we executed 1 1031 exchange back in 2014, selling a duplex in Richmond, CA (rough neighborhood, super hard to manage) to 3 low-maintenance SFRs in San Antonio, and added another SFR in San Antonio earlier this year. We're also looking to sell one of our Chandler properties and 1031 that property into 2 additional SFRs in San Antonio (sale expected to close next month).
I love your suggestions too on Lifestyles Unlimited - I'm actually a member (Preferred Investment Group) there! Love their education, and they have been key to allowing us to expand out of California into Texas.
If you don't mind me asking, how did you research / develop contacts / get comfortable with Northeast Ohio, and what made that market so attractive to you? I have been considering Midwest / Great Plains locations for a while as well, but unsure how to develop a network of trusted folks in those areas and focus in on the right market.
I had connections in Ohio, through a colleague in San Diego. The cap rates are phenomenal and my 1031 exchange money could not commingle as a passive in any of lifestyles deals. So, I am a basic member and did it on my own in Ohio.
We're also looking to sell one of our Chandler properties and 1031 that property into 2 additional SFRs in San Antonio (sale expected to close next month).
Welcome Brian! In the next month or so I'm going to be doing a 1031 exchange with a rental we have in Gilbert and invest into a couple DSTs (Delaware Statutory Trust). We have a great property manager and tenants in AZ but we like the structure and benefits of what the DST will give us.
We're also looking to sell one of our Chandler properties and 1031 that property into 2 additional SFRs in San Antonio (sale expected to close next month).
Welcome Brian! In the next month or so I'm going to be doing a 1031 exchange with a rental we have in Gilbert and invest into a couple DSTs (Delaware Statutory Trust). We have a great property manager and tenants in AZ but we like the structure and benefits of what the DST will give us.
Very interesting, thanks Michael for sharing - I'm not very familiar with DSTs, though do understand the concept. If you don't mind me asking, did you work with a particular group to identify the DSTs that you're liking?
I like the idea, esp. down the road when we are not as interested in managing the day to day activities of rentals.
I had connections in Ohio, through a colleague in San Diego. The cap rates are phenomenal and my 1031 exchange money could not commingle as a passive in any of lifestyles deals. So, I am a basic member and did it on my own in Ohio.
Thanks Swanny for sharing! That is excellent - your story sounds like one they should do on the BP - I would personally get a lot out of it, and I think a lot of California investors would too, who are looking at selling some appreciated property in California, and successfully branch out to better cash flowing areas.
I don't think that @Brandon Turner and @Joshua D. would want to talk on a podcast to a basic member. I am not a plus or pro member. Also, I have a goal of changing the paradigm of the average BiggerPockets member. I truly believe in avoiding the paradigm I hear a lot on this site and others of something for nothing, instantaneous gratification, diseased mentality. People call and reach out to me daily here on BiggerPockets and they make a lot more than me I do in W2 earnings and they are broke. They don't even have a reserve fund for when life happens.
When they reach the fork in the road, they do not choose the road less traveled. They choose the easy way at the time and end up making it the hard way in the long run. The natural progression of moving from single family to Apartment Complex financial freedom plan, using the dead equity and 1031 Exchanging up is a proven and verifiable path to financial freedom. Many people can't even fathom the two differences of having a big bucket of money when you retire or the preferred method of members with over 1000 front doors when they retire. The preferred method allown you to create multigenerational wealth of 1 million minimum of tax deferred cash flow per year upon retirement. Not a big taxable bucket of cash that you can take from, until you die and pay taxes on those withdrawals. Then your kids inherit what? That is the poor man or women way of thinking. That paradigm doesn't exist for me any longer.
Hi everyone, I'm new to Bigger Pockets. Like Swanny, I too exchanged some appreciated SFR's and condos from California, Oregon and Hawaii into apartments over the last 10 years. Mine are in Dallas and I've developed a great team over there for property management and finding new deals. I own a total of 58 doors (mostly 8-12 unit buildings). I've been trying to figure out my next steps and appreciate the referral to the LUI and am really liking Bigger Pockets.
The only reason I didn't become a preferred member of Lifesyles was that I was informed that my entity could not coexist with one of LUI deals as a passive. I was going to pay to become a preferred member. It didn't work out. Soooooo, I am just a basic member.
Swanny - I very much appreciate and agree with your view point on financial freedom plan. Great words. My progression is much slower than yours, but definitely that is my game plan.
Rob - congratulations too on your progression! In case helpful, although I'm only in SFRs now, I did join LUI's preferred program to get the education, to see transactions done, to possibly invest passively with some lead investors and to eventually get my own apartment complex. I joined in early 2015 - the education is great online, but the key benefits I think are the interactions with the lead investors there, and the roadtrips. So to the extent you make it out to Dallas consistently, in my opinion its worth it. The nice thing too about the preferred group is that they are very open in sharing details of their deals, what has worked and what has not, and helping each other out through challenges at properties - there is a good teamwork atmosphere, which I appreciate.
@Michael Swan hah! We'll talk to anyone with a cool story, Pro or not! Most of our podcast guests aren't pro when they come on - we just guilt them into it after! :)
Love to read about this stuff. I'm sitting on a $700k fourplex in San Diego, $350k in equity in three years and a cap rate that makes me sick to my stomach when thinking about it....
I love this stuff and when I listened to Grant Cardone's podcast and subsequently read his 10x rule and Multifamily Millions by Lindahl, while at the same time listened to LUI podcasts too, I was set!!
Call me if you want to follow my path. Look at my profile for my direct cell number. You do realize they are starting to give loans to people that have NO business owning a home. Flipping is rampant and San Diego is approximately 5-10% off the peak at our last housing crash. History will repeat itself!!
@Michael Swan Great post. When you say history will repeat itself is that the history of 500% appreciation in SD since 1980 or? I was thinking a healthy flip market was a sign of high demand for new style housing when there is little supply. Is that not the case?
I am thinking people will start saying you have to buy a house it is the American Dream and you won't be able to afford a house, in San Diego. When the flippers come out in droves, the end is pretty near. 1031 exchange that equity people!!
We're also looking to sell one of our Chandler properties and 1031 that property into 2 additional SFRs in San Antonio (sale expected to close next month).
Welcome Brian! In the next month or so I'm going to be doing a 1031 exchange with a rental we have in Gilbert and invest into a couple DSTs (Delaware Statutory Trust). We have a great property manager and tenants in AZ but we like the structure and benefits of what the DST will give us.
Very interesting, thanks Michael for sharing - I'm not very familiar with DSTs, though do understand the concept. If you don't mind me asking, did you work with a particular group to identify the DSTs that you're liking?
I like the idea, esp. down the road when we are not as interested in managing the day to day activities of rentals.
Yes being more hands off was one of the reasons DSTs have been so attractive to us. We did our research and found Leslie Pappas who advised us on what DSTs would fit our investment goals and risk tolerance. Leslie is very straightforward and we like her style. We were also able to spend a day visiting sponsors and learned a lot.
Very much agree on a meet up / coffee. I've been to a few REIAs in San Diego, some good, but would be great to have some focused conversation with like-minded investors that aren't selling...