We did it! We hit our investment goal!

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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Investor · Los Angeles, CA · Member since 2015 · 50 posts · 20 votes
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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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  • Engineer · Bel Air, MD · Member since 2009 · 136 posts · 24 votes
    11y

    congratulations! Awesome to read! Highly motivational!

  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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    Originally posted by @Jay C.:

    Fantastic you hit your goal but....................I see all these congrats is that a good thing or bad? Only you know. More info is needed. What level of debt do you now have......whats the net on this.  I guess what I am saying is if I had $1,000,000 per month coming in on 3000 properties that I had loans on and netted $10,000 out of that I would consider that a nightmare of leverage and by definition a "house of cards".

    Back to you...if your happy that's all that matters...Right :-)

    Our P&I is $7,400 a month - so we would need 75% of our units vacant to not be able to make a mortgage payment (currently 0 are vacant except 2 of the units we bought last week and I anticipate leases on those this weekend). It is scary having over a million dollars of debt but our total portfolio is at a 60% LTV based on appraisals done in the past year.

  • FPO, AP · Member since 2015 · 120 posts · 19 votes
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    @Brie Schmidt

    Congrats on achieving your goal. Wish you luck as time passes.

    George

  • Investor · Houston, TX · Member since 2015 · 59 posts · 17 votes
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    Wow very impressive and quite an inspiration for us "little" guys lol   keep up the good work and continue to thrive!!

  • Investor · Dundee, IL · Member since 2015 · 1 post · 0 votes
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    Congrats! Awesome story. 

  • Manville, NJ · Member since 2015 · 141 posts · 87 votes
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    Congrats! Reading about success like yours is very motivating! 

  • Mooringsport, LA · Member since 2014 · 25 posts · 31 votes
    11y

    You rock /high 5 Brie!

  • Flipper / Rehabber / Real Estate Investor · Toronto, Ontario · Member since 2012 · 392 posts · 77 votes
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    Hi @Brie Schmidt - I have to say that in my opinion you would be a great candidate for another appearance on the podcast so we can hear more about what's happened during the last year.  Anyone else who agrees should add a vote to Brie's original post.

    Hint, hint @Brandon Turner and @Joshua D.

  • Flipper/Rehabber · Waianae, HI · Member since 2014 · 37 posts · 8 votes
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    Congrats and in just 4 years. What a wonderful accomplishment hope to be joining you       guys soon we give our selves 5years.This gives us hope and lots of motivation

  • Minneapolis, MN · Member since 2014 · 332 posts · 288 votes
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    Brie Schmidt to make sure I understand, you are grossing $35k/month, but that's before all expenses and mortgages are paid, correct? Any sense of what you are netting (actually taking home) per month?
  • Lynn MontangPro Member
    Real Estate Agent · Portland, OR · Member since 2014 · 42 posts · 23 votes
    11y
    That is exactly my goal, but I was thinking 12 years to get there, so your 4 years blows me away!! I am SO listening to your pod cast ASAP! Congrats to you!!
  • Wayne, PA · Member since 2012 · 144 posts · 24 votes
    11y

    congrats, huge accomplishment!

    How did you structure the deal with borrowing from your brother?

    I have a family member who would do the same, but they need some convincing.

  • Michael S.Pro Member
    Rental Property Investor · Richfield Springs, NY · Member since 2014 · 59 posts · 8 votes
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    @Brie Schmidt

    So awesome!! Congrats. I've followed your story and learned a lot.  Wish you guys the best and I agree all the reading and advice is amazing but at some point have to step back and gather your thoughts. I'm doing the same now. Closed on a 21 unit this week and have a 3 family under contract. Couldn't have done any of of this without. Bigger pockets   Just wanted to say thanks

  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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    @George Calbert and @wayne smith and @Jake Recz and @Andy Sauder

     Thanks!

    @Larry Smet - Maybe I will!

    @Alvin Taylor and @Kelvin Schaeffer and @Lynn Montang

    Thanks!

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

    Brie Schmidt to make sure I understand, you are grossing $35k/month, but that's before all expenses and mortgages are paid, correct?

    Any sense of what you are netting (actually taking home) per month?

     It is still a little early to tell for sure. Our Chicago properties which we have had for awhile run at about 25% expenses but these are newly rehabbed properties in A/B areas. Milwaukee has had a lot of start up costs getting buildings and units up to our standards. I estimate we will be running at 55% expenses but according to the seller's schedule E's that were provided to us when we bought they were running at about 40% expenses. If we use the 55% we should be netting around $10k a month.

    The properties we bought last July are already ramped up and operating at about 40% - All but one of the December properties are ramped up and at about 40% and we are still working on getting the ones from March and May up and running

  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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    Originally posted by @Kyle M.:

    congrats, huge accomplishment!

    How did you structure the deal with borrowing from your brother?

    I have a family member who would do the same, but they need some convincing.

     It was structured very informally.  My brother and I are pretty close so there is nothing in writing.  I did send him the analysis of our current portfolio and what we were expecting to buy so he could see the numbers and understand what I do.  

  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
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    Originally posted by @Michael S.:

    @Brie Schmidt

    So awesome!! Congrats. I've followed your story and learned a lot.  Wish you guys the best and I agree all the reading and advice is amazing but at some point have to step back and gather your thoughts. I'm doing the same now. Closed on a 21 unit this week and have a 3 family under contract. Couldn't have done any of of this without. Bigger pockets   Just wanted to say thanks

     Congrats to you!  I too had to step away last year and focus on trusting my gut.  

    Can't wait to read your story someday

  • Investor · Peachtree Corners, GA · Member since 2014 · 1k+ posts · 1k+ votes
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    Originally posted by @Brie Schmidt:
    Originally posted by @Kyle M.:

    congrats, huge accomplishment!

    How did you structure the deal with borrowing from your brother?

    I have a family member who would do the same, but they need some convincing.

     It was structured very informally.  My brother and I are pretty close so there is nothing in writing.  I did send him the analysis of our current portfolio and what we were expecting to buy so he could see the numbers and understand what I do.  

     You may want to discuss this with your accountant.  If you ever get audited a simple signed loan agreement would probably make your life much easier.  IMHO, a signed agreement is required in all partnerships even when it is between two close siblings, because it helps prevents misunderstandings.  In other words what  you think you agreed to may not be what your brother thinks he agreed to, add in memories fade with age then your inviting some very avoidable issues. 

  • Joliet, IL · Member since 2015 · 52 posts · 12 votes
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    @Brie Schmidt Congratulations!  We moved from CA to Joliet (outside of Chicago) last Dec. (family obligations) , Do you know of any investment groups in the area?  I'm working on a rehab in Will County.  Have properties in S. Illinois and one in CA.  Looking for contacts, investors to get the ball moving here.  Slow start.

  • Residential Real Estate Broker · Winston Salem, NC · Member since 2011 · 345 posts · 120 votes
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    Welcome @Charles W.. I am from the Joliet area and specialize the South and SW suburbs as well. Let's connect.

  • Mike B.Pro Member
    Developer · Chicago, IL · Member since 2013 · 438 posts · 359 votes
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    congrats, Bri! I've been really busy but hope to see you @ a meet soon.

  • Syndicator of Large Apartment Buildings · Glen Mills, PA · Member since 2009 · 1k+ posts · 1k+ votes
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    @Brie Schmidt, it takes guts to quit your job and pursue a full-time career of real estate investing. So well done!!

    I am sure for you it hasn't been all sunshine and rainbows, I also quit my CPA job in 2011 to buy large apartment complexes and know probably what you went through to hit your goals.

    There are many challenges and obstacles to navigate the choppy waters of real estate investing.

  • Michael S.Pro Member
    Rental Property Investor · Richfield Springs, NY · Member since 2014 · 59 posts · 8 votes
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    @Brie Schmidt 

    Yes I wI'll tell my story soon. I've learned so much off of bigger pockets and maybe something I say will help someone

  • Realtor · Hendersonville, NC · Member since 2015 · 51 posts · 24 votes
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    Awesome!! Pure inspiration!

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