We did it! We hit our investment goal!

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We did it! We hit our investment goal!

Brie SchmidtBusiness Member
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Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes

Last week we hit our investment goal of $35k a month gross rental income. We bought our first investment property in August 2011 and the vast majority of our growth has happened in the past 10 months. We (my husband and I) now own 21 buildings and 59 units in Chicago and Milwaukee.

If you have been following my story I did a podcast last July (www.biggerpockets/com/show78 ) when I had just quit my job and we were just closing on our first out of state properties. Since then life has been pretty crazy and I did an update 2 months ago on what has been going on ( http://www.biggerpockets.com/forums/223/topics/178935-it-has-been-8-months-since-i-left-my-job-and )

Life is still crazy, especially since we just got back from Mexico and are leaving for a two week trip to Europe this week… but I foresee a more steady and manageable pace moving forward.

It hasn’t been all sunshine and rainbows. We have had our fair share of problems. Some buildings were an easy takeover where the tenants stayed, paid rent, and didn’t cause problems. Some we had tenants leave in the middle of the night or leave the place trashed. Some properties were profitable from day one and some won’t be profitable for at least a year. The good thing is because we have scale it all balances out and we are not putting our own money into them every month.

BP has been such a huge part of my success. I gained the confidence I needed to go into this full time and have met some amazing friends who have helped me so much along the way.

I am looking forward to this much needed vacation and returning in June fully recharged and ready to go!

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Second City Real Estate4.821 Reviews
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Hugh C.
Investor · Los Angeles, CA · Member since 2015 · 50 posts · 20 votes
11y
Originally posted by @Brie Schmidt:

@Derek Carroll- About half our portfolio is in Chicago with traditional residential financing. We were able to cash out on some of our appreciation to buy the rest with 80% LTV commercial loans. We borrowed $100k from my brother to push us past the goal line and now we will be pulling more equity out of Chicago to pay him back.

@Steve Perkins- It has been beyond my wildest dreams, I honestly barely recognize myself and didn't know I had it in me to do all this.  

@carl c - Thanks!

@Matt Cramer Thanks!

Brie,

I'm sure you are using BP's guidelines about cash flow and you are careful about not pulling too much cash out on your appreciation.  As with my business partner ventures, my own rental properties are never leveraged too the max even if the current net rental income can cover the new loan.  One never knows what may occur to cause net rental income to suddenly drop for a while.  So many "investors" do not consider that scenario as they were pulling cash out of all the built up equity.  In almost 30 years of ups and downs of real estate I have not had any forced loss of real estate because all the loans were easily covered by even dropping rental income.   Rental income does not always go up each year.  Keep you wildest dreams from turning into nightmares.

Hugh

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  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    10y
    Originally posted by @Kenneth LaVoie:

    @Brie Schmidt I think your idea of "optimizing" is spot on. In fact, once you get to a certain "size" the extra money or return you can earn from "tweaking" what you already have may or may not exceed what you could make by buying more buildings, but it certainly is close, and it's MUCH less stressful. For example, we hunkered down and started weatherizing, and increasing energy efficiency in general, which here in Central Maine is very important. Low flow shower heads might cost $15 each, but they save 10-15 bucks per year. 70-100% return on investment. Yes, it's only $10-$15 at a time, but there are literally hundreds of "micro investments" you can now make within your own existing portfolio that will net you 20-100% ROI or better year in year out. Hope your Europe trip was grand! We're planning a similar trip but waiting until our child is more appreciative of the culture. Stay well.

     There are a ton of little things you can do to optimize your rentals, I didn't think of the low flow showerhead, thanks for sharing!

    Podcast Guest on Show #132
    Second City Real Estate4.821 Reviews
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    0Reply
  • Andy Wu
    Rental Property Investor · Columbus, OH · Member since 2015 · 64 posts · 7 votes
    10y

    Brie,

    Your story is great. I have one question for you. In your year 3 (2014), how can you buy 10 buildings in one year? I mean how to get the down payment for those. I have trouble to get down payment after using all the home equity loan. Due to having more than 4 loans, I can't do refi. 

    Andy

    0Reply
  • Brie SchmidtBusiness Member
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    OP
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    10y
    Originally posted by @Andy Wu:

    Brie,

    Your story is great. I have one question for you. In your year 3 (2014), how can you buy 10 buildings in one year? I mean how to get the down payment for those. I have trouble to get down payment after using all the home equity loan. Due to having more than 4 loans, I can't do refi. 

    Andy

     The down payment came from a cash out refi on a rehab we did.  But the loan came from a commercial lender, so all in all we have 3 loans in our name and the rest are commercial

    Podcast Guest on Show #132
    Second City Real Estate4.821 Reviews
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    0Reply
  • Cal C.
    Investor · Peachtree Corners, GA · Member since 2014 · 1k+ posts · 1k+ votes
    10y
    Originally posted by @Brie Schmidt:
    Originally posted by @Kathy Argento:

    Brie, I have a question.

    I'm a newbie, and just about to buy my second flip in Cleveland, but eventually I am wanting to buy and hold like you and have it replace my income.  My question is.....if $35K is your gross monthly rents, can I ask what your estimated "Net" profits (income) is each month?  Now if this is too personal of a question, please tell me, but I want to get to a goal of $20,000 passive income per month, so was wondering of $35K gross would accomplish that.

    Thanks Brie!

    PS:  I absolutely LOVED your podcast when you first quit your job!  You are an inspiration to me!

    Kind Regards,

    ~Kathy Argento

     Sorry, I just saw this.  With $35k gross rents we net about $10k a month.

     Those are some great numbers!  Is that net of vacancy and capex?

    0Reply
  • Jenny Pennock
    Investor · Wichita, KS · Member since 2015 · 21 posts · 3 votes
    10y

    Hi @Brie Schmidt, 

    I just love your story!  It's so very inspiring!  I was wondering in the beginning, did you know you wanted to go after buy and holds from the get go?  Or what was it you were looking for when you told every other realtor you met your criteria?  You said after a while you were getting deals emailed to you each week and I was just curious.  

    I think it's amazing how fast you guys ramped up!  That was huge!

    0Reply
  • Brie SchmidtBusiness Member
    Moderator
    OP
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    10y
    Originally posted by @Jenny Pennock:

    Hi @Brie Schmidt, 

    I just love your story!  It's so very inspiring!  I was wondering in the beginning, did you know you wanted to go after buy and holds from the get go?  Or what was it you were looking for when you told every other realtor you met your criteria?  You said after a while you were getting deals emailed to you each week and I was just curious.  

    I think it's amazing how fast you guys ramped up!  That was huge!

     We always wanted to buy and hold, it is boring and not fancy, but it is what will help us retire.

    Our goals and way of doing things has changed over the years, it really just evolved.

    Podcast Guest on Show #132
    Second City Real Estate4.821 Reviews
    WebsiteView Page
    0Reply
  • Brie SchmidtBusiness Member
    Moderator
    OP
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    10y
    Originally posted by @Cal C.:
    Originally posted by @Brie Schmidt:
    Originally posted by @Kathy Argento:

    Brie, I have a question.

    I'm a newbie, and just about to buy my second flip in Cleveland, but eventually I am wanting to buy and hold like you and have it replace my income.  My question is.....if $35K is your gross monthly rents, can I ask what your estimated "Net" profits (income) is each month?  Now if this is too personal of a question, please tell me, but I want to get to a goal of $20,000 passive income per month, so was wondering of $35K gross would accomplish that.

    Thanks Brie!

    PS:  I absolutely LOVED your podcast when you first quit your job!  You are an inspiration to me!

    Kind Regards,

    ~Kathy Argento

     Sorry, I just saw this.  With $35k gross rents we net about $10k a month.

     Those are some great numbers!  Is that net of vacancy and capex?

     That is the net after everything -   so what we show on our taxes (less depreciation)

    Podcast Guest on Show #132
    Second City Real Estate4.821 Reviews
    WebsiteView Page
    0Reply
  • Jenny Pennock
    Investor · Wichita, KS · Member since 2015 · 21 posts · 3 votes
    10y

    Thanks @Brie Schmidt, I completely agree.  

    0Reply
  • Kay Kay Singh
    Rental Property Investor · Fort Wayne, IN · Member since 2016 · 258 posts · 177 votes
    10y
    Brie Schmidt That is a great success story and that is what motivates new invested . Thanks for sharing with the BP family.
    0Reply
  • Garnett Broy
    Investor · Chicago, IL · Member since 2014 · 16 posts · 3 votes
    10y

    Wow! This is awesome! Congratulations Brie! Your first BP podcast was what got me into the real estate investing world. My wife and I now have 5 properties and we are looking to expand. We can't wait for the day when we get to post a success story like this!

    1Reply
  • Carolyn Morales
    Investor · Jacksonville, FL · Member since 2015 · 504 posts · 217 votes
    9y

    Thank You for the inspiration Brie Schmidt

    0Reply
  • Peter TverdovBusiness Member
    Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
    9y

    @Brie Schmidt what are the commercial loan terms that you were getting? DP? Tenor and rate?

    [email protected]732-289-3823
    0Reply
  • Ahsan Lake
    Herndon, VA · Member since 2016 · 14 posts · 2 votes
    9y

    When you started out, what type of financial shape were you in? What was your combined income when you started? 

    Another question for the board, are successes like these possible on the East Coast? I know I'm not going to be able to buy houses that fast in northern virginia.

    0Reply
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