How I went from 0 - 20 properties w/out investors or my own money

66 Replies

@Jay Hinrichs I agree. The only reason I bought in Pittsburgh is that I grew up there an know the area. I also have an office in Pittsburgh so I travel there quite often still. The fact of the matter is I own a RE accounting firm and investment advisory fIrm. RE is a fabulous way to build wealth..but so are other investments. Be safe, do both. Diversification is key. It bothers me when I see people post about cashing out 401k’s to ‘start’ investing in RE. That’s basically saying, ‘this investment isn’t working so I’m going to switch’. I see people everyday that have amassed millions from stock/bonds, real estate, business ownership. Don’t switch gears so fast. Investing is methodical, not emotional.

Most of the folks I see that are uber successful built up their business over a lifetime and sold out to the next operator.. 

Garbage for one.. has a huge payday...   Anyway.. thanks for filling in the gaps..

I have just seen the carnage from folks who just don't know what they don't know and for some reason think land lording is the only way to get what they call " financial freedom" many small business will do as well if not better than owning rentals.. and when you scale its a business its not passive income.. I had at one time 350 SFR's I built them up in 2010 to 2013 and sold out.. and the guy I sold to could not make a go of them.. he cratered I walked with 7 figures.. it takes a certain mentality and skill set to run hundreds of C class.. he then went to Pittsburg without me.. because I did not know that market and bought another 50 to 75 homes.. and those all cratered you may have bought some LOL or your clients did for sure..

There is money to be made in every community or most every community..  no doubt..

Awesome story. This sort of thing is the next phase for me, but I am moving into it carefully. So, you are grossing 14k, how much are you netting may I ask? Are you in it for cash flow? Appreciation? Getting someone to pay for your properties? All of the above?

The story you tell leads me to believe you "own" all of these using high leverage, and I wonder how much cushion you have. Over-leveraging makes a little minnow like me nervous. I would like to find a way to do it without risking everything. I suppose some people might say I risk nothing if I use other peoples money, but I find the time I put into this stuff worth plenty.

@Account Closed I can assure you I’m not over leveraging, in my opinion. It’s currently at about 50% debt to equity, so there’s a substantial cushion. The profit margin is currently around 60% although it’s gone down over the past few months as some renovations took place. The goal is buy and hold, appreciation and cash flow. If I can get 10 years worth of cash flow from a property, I sell it. Other than that once the market slows we will probably move into residential/commercial development.
Originally posted by @Brian M Sweeney :
@Merritt Steinbach I can assure you I’m not over leveraging, in my opinion. It’s currently at about 50% debt to equity, so there’s a substantial cushion. The profit margin is currently around 60% although it’s gone down over the past few months as some renovations took place. The goal is buy and hold, appreciation and cash flow. If I can get 10 years worth of cash flow from a property, I sell it. Other than that once the market slows we will probably move into residential/commercial development.

That's awesome. Thanks for sharing. Those are numbers I would be comfortable with. I am currently at 0% leverage and making between 18%-29% pre-capital expenses/perfect year scenarios. I feel really good with my numbers, but want to make the most out of the money I do have, so I'm starting to explore leverage. Great to hear stories of people making it work.

@Account Closed I would stick to what you are doing. If you have zero debt, that is the absolute best scenario. In my opinion you don’t want to get into leverage when the market is as hot as it’s been. Collect your 20% return and wait until the market normalizes and then start using leverage.

@Brian M Sweeney if you are grossing 14K/month what are you netting before taxes?  Do you depreciate?  Also, what is your corporate structure?  Are these properties held by seperate LLCs?  Just curious.  Congrats on a job well done btw.