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Real Estate Deal Analysis & Advice

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Philip Williams
  • Rental Property Investor
  • Rockford, IL
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7 buildings 20 units 18 months thanks to BiggerPockets

Philip Williams
  • Rental Property Investor
  • Rockford, IL
Posted Jul 5 2014, 14:12

So I decided to give a shout out to bigger pockets. I decided to start investing in real estate 18 months ago at the time I owned 1 condo that had been in the family for years. It was in a nice neighborhood was payed off and cash flowed about 100 a month. I decided moving into multi family was something that I was interested in, over the next year I sold the condo and bought 3 duplexes with a partner who also had very little experience in real estate.

We were moving along but very slowly, I had no idea how to finance any more deals. I had never heard of creative financing and couldn't get a bank to give us anything due to the lack of company history and our debt to income ratios being high. We had no debt besides mortgages but banks wouldn't budge. 

Everything changed about a month ago when I found bigger pockets. I decided to educate myself and started searching for info. I had never read a real estate book or listened to a podcast as of a month ago. Then I found the bigger pockets podcast which led me to the website. I couldn't get enough I listened to the podcast constantly four sometimes five episodes a day. I read every article I could find made a page and started searching alternative methods of funding. 

I currently have four closings set up in the next 2 months. A six unit building owner financed closing 7/15, a four unit closing 8/1 and two duplexes one on 8/7 and the other 8/15. None of this would have been possible without the knowledge I gained on the podcast and on the forums. It took me 16 months to amass 6 units without bigger pockets and 2 months to amass 14 more with it. Just wanted to say thanks to the everyone, those I met at the Chicago REA and those I interact with online. I will continue to update this thread if anyone is interested and post the exact numbers from the individual buildings.

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Paul Palmer
  • Real Estate Broker
  • Minneapolis, MN
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Paul Palmer
  • Real Estate Broker
  • Minneapolis, MN
Replied Jul 7 2014, 07:44

Nice job, @philip williams, now as you begin to build some equity you can create a note on one of the properties and use it as a down payment. Having sweeteners available such as personal property: cars, boats, Karatbars or silver bars can sometimes be the final perk you can throw into a deal to lock it down. Learning more about the seller and their interests, wants and needs are the keys for success many times.

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Arthur Banks
  • Real Estate Investor
  • Waukegan, IL
77
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367
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Arthur Banks
  • Real Estate Investor
  • Waukegan, IL
Replied Jul 7 2014, 08:04
Originally posted by @Philip Williams:

@Arthur Banks Thanks I appreciate it and yeah I'm  pretty close. If you want to meet up grab lunch talk real estate anytime just let me know. 

Sounds good to me. Was thinking the same.  Shoot me your contact info via message. Mine should be below.

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Shakir Ansari
  • Investor
  • Lake Mary, FL
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17
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Shakir Ansari
  • Investor
  • Lake Mary, FL
Replied Jul 7 2014, 09:29

Hey Philip I just signed back into BP after I moved from Pittsburgh to Orlando and this story really lit that fire under me that I needed! Great Job and hope you have continued success!

Shakir

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Philip Williams
  • Rental Property Investor
  • Rockford, IL
702
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385
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Philip Williams
  • Rental Property Investor
  • Rockford, IL
Replied Jul 7 2014, 09:32

@Paul Palmer    Hey paul great advise thanks! Perhaps you could explain what you mean by creating a note on a property that has equity in it. Most people have only tried a heloc or a refi things of that nature. @Arthur Banks will do sounds great! @Jimmy Moncrief  @Donald Nylander @Eric M. @Marco Y. @LaTisha Crawford Thanks for the well wishes hopefully you have read the whole thread and utilize all the resources bigger pockets has to offer it's done wonders for my businesses. 

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Rolanda Eldridge
  • Investor/Realtor
  • Hoover, AL
459
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1,309
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Rolanda Eldridge
  • Investor/Realtor
  • Hoover, AL
Replied Jul 7 2014, 10:05

@Philip Williams ....Congrats!!  You are moving and shaking..Follow your flow, but don't take on too much at one time especially without significant reserves.  

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Zoran M.
  • Real Estate Investor
  • Cleveland, OH
111
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301
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Zoran M.
  • Real Estate Investor
  • Cleveland, OH
Replied Jul 7 2014, 10:17

@Philip Williams - Great story! An inspiration!

If I may ask, why were you not approved for loans if you had no debt, other than mortgages? Were you working with a portfolio lender? 

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Wendell De Guzman
  • Investor
  • Chicago, IL
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Wendell De Guzman
  • Investor
  • Chicago, IL
Replied Jul 7 2014, 10:20

Congrats @Philip Williams ! I like it - massive action equals massive success!

Just be sure to manage these properties right. The key in creating value in apartment buildings is the management. Acquiring them right is just half of the equation. You can mismanage a good property, and even if you acquired at good price or good terms it can become a bad property that can suck the life out of you. I agree with @Ben Leybovich 's advice as well as @Aaron Mazzrillo 's. You need to slow down and focus now on managing these properties.

I have experience in apartment buildings as well (total units acquired: 169). SO let me know if you have any questions.

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Steven Rampersad
  • Homeowner
  • Montreal, Quebec
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Steven Rampersad
  • Homeowner
  • Montreal, Quebec
Replied Jul 7 2014, 10:36

Congratulations!

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Ben Leybovich
  • Rental Property Investor
  • Phoenix/Lima, Arizona/OH
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Ben Leybovich
  • Rental Property Investor
  • Phoenix/Lima, Arizona/OH
Replied Jul 7 2014, 10:43

..The key in creating value in apartment buildings is the management..

 Ain't that the truth :(

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Shaun Weekes
  • Loan Officer / Processor / Life & Health Agent
  • Rancho Cucamonga, CA
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Shaun Weekes
  • Loan Officer / Processor / Life & Health Agent
  • Rancho Cucamonga, CA
Replied Jul 7 2014, 12:28

Philip,

Excellent work and thanks for sharing this with us :)

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Philip Williams
  • Rental Property Investor
  • Rockford, IL
702
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385
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Philip Williams
  • Rental Property Investor
  • Rockford, IL
Replied Jul 7 2014, 13:40

@Zoran M.  Hey great question Zoran, I don't show any W-2 income which is awful for getting mortgages. As far as personal loans I was offered small amounts by banks 5-20k but I already had cash reserves so a small personal loan wasn't going to help me out much in the short term. I have not worked with a portfolio lender and have just now started talking to banks about portfolio loans in the future. 

@Wendell De Guzman  Hey Wendell nice to hear from you! I saw you at the last chicago meetup but didn't have a chance to say hi, I will make sure to do so at the next one. The tenant management does seem to be a problem for most people especially as the number of tenants that you have to deal with goes up. Fortunately I don't have a day job so I am able to devote as much time to the task as is necessary. 

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Pawan W.
  • Investor
  • Ellicott City, MD
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Pawan W.
  • Investor
  • Ellicott City, MD
Replied Jul 7 2014, 13:52

@Philip Williams Congratulations, great story!

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Jonathan K.
  • Investor
  • Scotch Plains, NJ
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Jonathan K.
  • Investor
  • Scotch Plains, NJ
Replied Jul 7 2014, 14:05

@Philip Williams 

 Very inspiring ramp-up.

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Mehran K.
  • Investor
  • Wichita Falls, TX
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Mehran K.
  • Investor
  • Wichita Falls, TX
Replied Jul 7 2014, 15:06

Way to hustle @Philip Williams!

Like many others have said earlier in this thread, slow down and let things stabilize! Can't wait to hear how things progress later down the road.

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Robin B.
  • Homeowner
  • New Orleans, LA
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Robin B.
  • Homeowner
  • New Orleans, LA
Replied Jul 7 2014, 17:27

Congratulations.  I too have found so much knowledge on this site.  Finish strong!

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Lorissha Coburn
  • Addison, IL
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Lorissha Coburn
  • Addison, IL
Replied Jul 7 2014, 17:39

Truly an inspirational story. it is an example of how starting off small you can end up big!

It's funny you mentioned  condo ownership,I talk about that all the time especially seeing you can buy some cheap. Personally, I think that having multi-units  is a great way to get for long time income. I grew up in a family owned multi-unit. So doing the math you found yourself a goldmine.

Well,my family aren't members of a site like this and stopped at a few properties. That's over with now but here I am looking a pre-licensed agent. Reading through forums and stopping in awe at posts like yours. The resources you find online like this site is valuable. More valuable  because you used what you learned.

Congradulations,

Account Closed
  • Real Estate Investor
  • boston, NH
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401
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Account Closed
  • Real Estate Investor
  • boston, NH
Replied Jul 7 2014, 18:10

good for you man!  i am hoping to get into commerical investing soon.  once i own 30 units beers are on me

goodluck and keep goin strong

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Andy Weber
  • Real Estate Investor
  • Atlanta, GA
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Andy Weber
  • Real Estate Investor
  • Atlanta, GA
Replied Jul 7 2014, 18:13

Nice work, @Philip Williams! I just found BP as well and am amazed by all the great content. Looking forward to following your progress. 

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Stephen D.
  • Investor
  • Lake Zurich, IL
12
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53
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Stephen D.
  • Investor
  • Lake Zurich, IL
Replied Jul 7 2014, 18:51
Originally posted by @Ben Leybovich:

Guys - there is no magic to this.  Always remember the following 2 things:

One - you don't know what you don't know...in fact, you don't even know to ask!

This is not a commentary on anyone's intelligence, but on experience

Second - stumbling blocks and stepping stones look a lot alike...the problem is that most people learn which is which by stepping on one.  Unfortunately that's painful indeed.  The other way to negotiate this obstacle course is with the hindsight of - experience.  Experience ...!

Now - you can tell me that this is exactly what you are doing - buying units to gain experience.  No - you are playing the game.  You won't learn until you sit down and study the tapes of this game - what did they do, how did you respond, what can you do different next time, why bother...?

Investing is like wine - seasoning is key.  Seasoning = Perspective

I applaud action - this is the first step and one that most people never take.  But, it is not the most difficult!  Sitting quietly in the dark and taking stock of where we are is a lot harder - takes discipline.

In music, we have notes and we have rests.  Most people focus on the notes - I focus on the rests.  The rest, the quite silence, puts color to the notes...

This is a blog post in the making.  You guys mind if I reference this thread? 

 @Ben Leybovich

So true.  Can't wait to read the blog.

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Ben Leybovich
  • Rental Property Investor
  • Phoenix/Lima, Arizona/OH
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Ben Leybovich
  • Rental Property Investor
  • Phoenix/Lima, Arizona/OH
Replied Jul 7 2014, 19:06

@Stephen D. 

Started putting some thoughts on paper today :)

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Rose San Filippo
  • Real Estate Agent
  • Amityville, NY
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Rose San Filippo
  • Real Estate Agent
  • Amityville, NY
Replied Jul 7 2014, 19:35

Wow! Congrats!

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Ryan Billingsley
  • Investor/Realtor
  • Wentzville, MO
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Ryan Billingsley
  • Investor/Realtor
  • Wentzville, MO
Replied Jul 7 2014, 20:13

Very inspiring!  Thank you for sharing!

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Larry Smet
  • Flipper / Rehabber / Real Estate Investor
  • Toronto, Ontario
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Larry Smet
  • Flipper / Rehabber / Real Estate Investor
  • Toronto, Ontario
Replied Jul 7 2014, 20:15
Originally posted by @Philip Williams:

@Paul Palmer    Hey paul great advise thanks! Perhaps you could explain what you mean by creating a note on a property that has equity in it. Most people have only tried a heloc or a refi things of that nature. @Arthur Banks will do sounds great! @Jimmy Moncrief  @Donald Nylander @Eric M. @Marco Y. @LaTisha Crawford Thanks for the well wishes hopefully you have read the whole thread and utilize all the resources bigger pockets has to offer it's done wonders for my businesses. 

 Great work Philip!  Thanks for posting this thread - there's some great content from you and the other posters.

One way to refinance is simply through private lenders - some people would be very content to get a regular check every month - secured against a stable cash flowing property.  Most people think of private lenders only for flips but your rentals are a lot less risky -so you can justify paying a lower interest rate.  And most private lenders won't ask you to fill out a stack of paperwork or check your credit score!  :)

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Philip Williams
  • Rental Property Investor
  • Rockford, IL
702
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385
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Philip Williams
  • Rental Property Investor
  • Rockford, IL
Replied Jul 7 2014, 21:41

@Ben Leybovich awesome just don't make me sound to crazy lol! @Larry Smet that's a crazy idea and it sounds so simple, I am definitely going to pursue that in the future great advise. 

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Clary C.
  • Real Estate Agent
  • Attleboro, MA
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Clary C.
  • Real Estate Agent
  • Attleboro, MA
Replied Jul 8 2014, 07:55

Congrats!!!!