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From 0 to 8 Rentals in Just 4 Months!
Hi all -
I've been a long time lurker on BP and am happy to say I've listened to every Podcast and read as many posts as I can. My passion for real estate started with rehabbing because I love turning old run down properties into updated homes that families can enjoy. I did a few rehabs back around 2002 as a hobby and then took a long hiatus from real estate.
This year I decided I wanted to get serious about investing. I hired a mentor in January to teach me how to wholesale off the MLS and quickly did two wholesale deals. I can definitely say that I don't love wholesaling but appreciate all those out there who do.
In April of this year, I was about to wholesale my third deal for a nifty $10k profit when my mentor recommended that I start building a rental portfolio. So I purchased the house for $56k and it currently rents for $1k a month. I quickly found a second house with very similar numbers a month later.
I continued to build relationships with realtors and was approached with a six house deal for $320k. All the houses have been completely remodeled and have tile throughout along with updated kitchen and bathrooms. The investor who owned them was moving to another city and didn't have the stomach to be a long distance landlord. I just closed on those six houses which each rent for $1k a month each to bring my total to eight houses.
Next month I'll be closing on my 9th house which is bringing me very close to my goal of buying 10 rentals this year. All houses are in Class C subdivisions and I purchased with 20% down loans.
Thanks to everyone who helped answer my questions along the way and to the BP folks who share knowledge and continue to motivate through podcasts and articles. I hope this motivates others to follow their dreams.
Happy Investing!
Ehab
Wow, congratulations! This is very inspiring and encouraging for us new investors out here! Thank you for sharing.
Congratz, gutsy move.
congrats man.. Hopefully one day I can build my rental portfolio this way!!!!
(Occasional reader / infrequent poster...)
I own about 1,000 units inside the loop. Many of them are in the SE area (which is why I'm replying)
When you say SE, are you talking about the SE of the innerloop? If so, drop me a line. I don't get to meet many other actual buyers in this area. While I no longer live in Houston, my company is still there and I'm buying all the time.
Congrats @Ehab Shoukry
Cool!!
Keep up the momentum you have!
Good luck.
jAY
Thanks for the motivation! Although not nearly as high dollar as yours, I'm looking to close in the next couple of weeks on the last of a streak of 10 units inside 6 months. good luck to you!
Congrats!!
Very inspiring, Thanks for sharing!!👍🏻
My goal is 25 doors in 6 years... this was an inspiring story!
@Ehab Shoukry Congrats! Why did you choose 'class C' for all the properties? Just want to learn.
@Steve Rozenberg Congrats to you too! Do you mind sharing some of the 'lessons learnt' that you mention? Thanks.
Great Inspiration.
For those mentioning BRRR, where I am located banks won't loan on the home value until 1 year after the purchase. Until then, they are limited to loaning 90% of the purchase price, and that assumes you have a good relationship with them.
For those of you who are buying, rehabbing, and refinancing, where have you been able to find 100% refinancing quicker than 1 year after purchase?
Originally posted by @Barb Reynolds:
Originally posted by @Brian Lauchner:
Originally posted by @Ehab Shoukry:
Steve...I think that's great advice. All of these properties fit my investment criteria. The biggest risk I have is with the tenants I inherited. They are going to need retraining, however, the properties themselves are all home runs IMHO...
Hey Ehab, congrats on your success! You said "the properties themselves are all home runs IMHO."....what is IMHO? I am not familiar with that acronym.
Thanks, Brian
I believe IMHO is "in my humble opinion".
I thought it stood for IN MY HONEST OPINION.........LOL (Laugh out Loud) ;)
I'm glad folks are finding motivation from my story. I always found it encouraging to hear people share their success stories and it made it feel like real estate investing was more possible than I imagined.
To answer your questions:
I used Spirit of Texas bank. They lent me 80% of the $320k purchase price with 5% interest on a 15 year amortized loan. I put 20% out of pocket but received multiple credits at closing including September's rent which the seller credited me.
I was able to come up with the money to put 20% down because of a live in flip that I did where I bought a house in an up-and-coming area, lived in it for three years, and sold it for twice as much as I purchased it for. That one decision has helped me to catapult my investing career because it gave me a healthy chunk of cash to be able to use to invest, rehab, have reserves, etc.
If I understand the BRRR strategy, I believe that usually involves getting a hard money loan to purchase and rehab the property and then you can refinance into a conventional loan, right? We have lenders here who will do that and lend 75% of ARV but you are paying hard money points and interest followed by additional points for the conventional loan. Plus you have to have a 720 credit score I believe to qualify for the conventional loan once you get more than four houses. Also these houses didn't need any repairs because they were properly rehabbed by the previous owner. Having said that, I may choose to refinance down the road to try and recover some of my initial investment but I'm happy with the current deal.
I also talked with some conventional lenders I used in the past and they were going to treat each house separately with a separate purchase price, separate loans, yada yada. I really was looking for a lender who would be willing to lend me on the bulk deal with one loan and simplify the process. The bank I used was able to do that for me.
Thanks for all of the positive feedback and keep the questions coming.
Ehab
Originally posted by @Lee S.:
Congrats. I have one request that I'm sure will go unanswered but it sure would be nice to talk in terms of $ value instead of units.
It's almost impossible to find an "mls" house under 200k in my area, I could buy 4 units in some areas for this cost if not more. I don't plan to buy off the mls, actually I refuse to buy retail for investment purposes and is why I've become a realtor and will be restarting a DM campaign asap. I'll gladly sell at retail and take a commission on top of that.
If you want any tips/tricks my help is free. Just appreciate seeing you around.
Originally posted by @Ryan Dossey:
Originally posted by @Lee S.:
Congrats. I have one request that I'm sure will go unanswered but it sure would be nice to talk in terms of $ value instead of units.
It's almost impossible to find an "mls" house under 200k in my area, I could buy 4 units in some areas for this cost if not more. I don't plan to buy off the mls, actually I refuse to buy retail for investment purposes and is why I've become a realtor and will be restarting a DM campaign asap. I'll gladly sell at retail and take a commission on top of that.
If you want any tips/tricks my help is free. Just appreciate seeing you around.
Thanks. I'm in the process of getting going again. I put everything on hold to get my license and then had to jump from one broker to another unexpectedly due to the investor part of what I want to do. Should be about 2 weeks before I'm active again.
Originally posted by @Ehab Shoukry:
This year I decided I wanted to get serious about investing. I hired a mentor in January to teach me...Next month I'll be closing on my 9th house which is bringing me very close to my goal of buying 10 rentals this year.
Thank you for sharing your story, Ehab. This is a great way to show how we can all benefit from learning from others when we're hungry to succeed. It would be great for you to share a follow up in a few months to see how your business is growing and if you took advantage of the BRRR strategy.
Thanks for the post Ehab! Glad to hear your success story. Like you, I am reading and listening to BP everyday and learning as much as possible. I started my real estate journey this year in wholesaling, and eventually plan on buying/holding property as well. It's nice hearing the success stories of others.
Originally posted by @Ehab Shoukry:
Hi all -
I've been a long time lurker on BP and am happy to say I've listened to every Podcast and read as many posts as I can. My passion for real estate started with rehabbing because I love turning old run down properties into updated homes that families can enjoy. I did a few rehabs back around 2002 as a hobby and then took a long hiatus from real estate.
This year I decided I wanted to get serious about investing. I hired a mentor in January to teach me how to wholesale off the MLS and quickly did two wholesale deals. I can definitely say that I don't love wholesaling but appreciate all those out there who do.
In April of this year, I was about to wholesale my third deal for a nifty $10k profit when my mentor recommended that I start building a rental portfolio. So I purchased the house for $56k and it currently rents for $1k a month. I quickly found a second house with very similar numbers a month later.
I continued to build relationships with realtors and was approached with a six house deal for $320k. All the houses have been completely remodeled and have tile throughout along with updated kitchen and bathrooms. The investor who owned them was moving to another city and didn't have the stomach to be a long distance landlord. I just closed on those six houses which each rent for $1k a month each to bring my total to eight houses.
Next month I'll be closing on my 9th house which is bringing me very close to my goal of buying 10 rentals this year. All houses are in Class C subdivisions and I purchased with 20% down loans.
Thanks to everyone who helped answer my questions along the way and to the BP folks who share knowledge and continue to motivate through podcasts and articles. I hope this motivates others to follow their dreams.
Happy Investing!
Ehab
Nice job! It's always encouraging to see people who keep at it and build themselves up a nice portfolio!
Personally, I was at 1 property about a year ago, now I'm at 6. :)
Thanks for sharing! Always nice to read a success story.
Those are AWESOME deals!
You're getting a .2 gross cap on those houses which I think is GREAT. It's great too because you get the deposit back relatively quick.
You're story is definitely one with power and I appreciate you sharing it. It's truly inspirational.
Do you mind sharing what you're expenses are like? Do they differ per house?
Update on the tenants?
Thanks.
Joe, way to go sir... Great job! Keep up the great work buddy... Looking forward to see what happens next for you sir.