New Goal: Purchase 400 units this year

New Goal: Purchase 400 units this year

Investor · Portland, OR · Member since 2012 · 163 posts · 121 votes

Hey all, 

My brother and I own and operate a small property management and construction company in Portland, Oregon.  We've been in business about 5 years.  We are also a licensed plumbing company and a licensed contractors.  We own a brewpub with 2 locations as well.  We have a lot of irons in the fire.

After reading "the one thing" and watching a few webinars, I realized that most of the effort I am putting into our real estate business is scattered.  I run payroll for all my companies, I do the taxes for all my companies, I handle 80% of the book keeping as well.  It's a lot of work.  Time to focus on one thing I can do such that by doing it, everything else will be easier or unnecessary.

I wanted to invite you all to join me on our journey of commercial real estate investment in the Portland Metro Area.  My brother and I have decided to take on a financial freedom goal of earning $160,000 a month in passive income (working less than 10 hours a week each) by the end of 2016.  I will be doing posts 2x a month on our journey with updates.

To accomplish this goal I realize that we need to own, manage, and be the preferred contractor on 400 units by the end of 2016.   Right now we own 19 units, we manage about 80, and manage construction on those 80.

We have made an offer to purchase another 14 units 2 weeks ago and the owner of those units will let us know about that shortly.

We have secured a team of investors to move forward on any properties over 50 units that we deem a reasonable deal and we have about $500,000 in liquid funds for capital on those ventures.

I could use help in a few areas if you guys have any advice.

  • First off, I am setting up our direct mail campaign in the metro area and other desirable areas.  I plan to hit it pretty hard with a list of about 800 apartment owners.  I am thinking about starting off with a postcard and a newspaper ad and AM radio spots.  I think that hits our target market of older apartment owners who are ready to let someone else either purchase the complex or let a management company manage it. We will be aggressively marketing to these owners with a mailing every three weeks until the Christmas holidays.
  • I will also be working on networking with property managers, accountants, lawyers, and commercial real estate brokers.  Any tips here would be great.  We are currently involved with IREM, NARPM, Letip, and ULI.
  • Another thing I need to dial in for when the right deal comes along is a joint venture agreement between our investors and us.  If anyone has an agreement or important items to include in that agreement I would be very grateful on advice there.
  • We also need to amend our property management contract to focus solely on multifamily.  Does anyone out there own a larger building and have a contract with a management company that they like or they thing is a good example?

Thank you in advance for all your help!  I am looking forward to hearing everyone's thoughts on the direction that we've chosen as well as other's experiences in similar ventures.

Cheers,

Chris Shepard

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Jason BottPro Member
Insurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
11y

@Chris Shepard I have to agree with @Brad Chandler and his marketing advice. 

Do you already have a list of 800 landlords?  If not, hopefully my marketing grunt work can help you out. 

I looked for lists of landlords, called list companies and could not find a good list.   All the lists only had class A monster apartment complexes owned by syndicates or private equity.  Not saying you don't want those, but you mentioned older owners looking to relinquish the day to day or the entire property.

So I created a list by having one of my assistants call the top 50 municipalities assessor offices in WI and ask for lists of 4 units or greater.  80% had them, of those, half were free, and the other half was $10 - $75. Every municipality had a different file/spreadsheet (after all, it is the government).  Once we combine the lists, removing duplicates, we researched the entities to get the phone #'s.

I have done a lot of cold calling and have had cold callers work for me over the last 20 years, and that list was one of the most responsive lists we ever used.  Hopefully this gives you some perspective when finalizing your marketing. 

Good luck and Ill be following along. 

See this reply in the discussion

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  • Sales · Honolulu, HI · Member since 2014 · 16 posts · 2 votes
    11y

    @Chris Shepard I am excited to hear about the progress of your story! Best of luck to you!

  • Real Estate Consultant · Camarillo, CA · Member since 2010 · 2k+ posts · 1k+ votes
    11y

    You need to be more specific on what your are trying to accomplish with excel.  Send me a sample of what you are trying to convert and what results you are looking for.

    I have yet to dive into marketing in MF and am interested in hearing how things go.  On the lists that you are getting from the title company, are you getting all of the follow?

    1. Type of commercial property MF or other

    2. Size Sq footage/number of units.

    3. Property address

    4. Owner's name

    5. Owner's address

    6. (Desirable but Optional)length of ownership

    7. (Desirable, but optional)Mortgaged or free and clear

    I have had difficulty getting all of these pieces together from a list broker and would be interested in hearing if you are getting better results from title.

    Let me know if you still need a management contract, as I have a few.

  • Investor · Portland, OR · Member since 2012 · 163 posts · 121 votes
    10y

    @Jeff Greenberg

    With title searches in Oregon we are getting pretty much everything.  But we are still guessing on whether an owner owned free and clear or not.  There's no way to track refinances or 2nd mortgages.  But we have purchase price and date of purchase.  It's pretty easy to target owners who are coming up on their 10 year rate adjustment from the bank.  

    I would love to see a management agreement or two from you.  I'll send you a pm with my email. 

    Lately I've been getting a lot of calls for property management so it has been sidetracking my direct mailing goals.  I am going to pull the trigger or our mailer tomorrow through yellow letters.  Hopefully all goes to plan!!

    Also on a side note, I get married to 2 weeks!  Cheers!!

  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    10y

    @Chris Shepard Looks like a great thread. you might want to put it in Investor Deal Diaries for people to follow along on. The more details on how you're putting together partners, financing, etc. the better, as that's one of the things people are always wanting to learn. Also, you mentioned your actual business structure, and I know there are investors scaling up that are always wanting to see how others handle the details, who does what, etc. 

    Are you building any new units or buying already built? 

    Looks like you guys have a lot going on, plus 2 brewpubs! Very impressive. 

  • Investor · Portland, OR · Member since 2012 · 163 posts · 121 votes
    10y

    @Karen Margrave

    Thanks!  If you want to transfer this thread over feel free.

    Another update.  Just launched my first campaign at yellowletters.com.  Sent out 1350  postcards to my list to be mailed Nov 3rd (day i get back from the wedding).

    I'm stoked!!!

    Cheers,

  • Rental Property Investor · Dallas, TX · Member since 2015 · 243 posts · 70 votes
    10y
    Congratulations, Chris! I just finished The One Thing w/aggressive MF objectives. I live in No. Ca. invest in Texas w/great property Mgmt coverage there. Let me know if I can help you.
  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    10y

    @Chris Shepard ok done! Good luck. 

  • Tucson, AZ · Member since 2015 · 70 posts · 24 votes
    10y

    Following this one.  This will be epic!  Good luck.

  • Investor · Houston, TX · Member since 2015 · 233 posts · 188 votes
    10y

    Looking forward to seeing your progress. Best of luck!

  • Toronto, Ontario · Member since 2014 · 615 posts · 172 votes
    10y

    @Chris Shepard

    I like  the focus and tenacity.....congratulations and keep the fire on...

  • Project Engineer · Miami Beach, FL · Member since 2015 · 203 posts · 64 votes
    10y

    @Chris Shepard If you were a company located here in Florida I would apply for a job with your company asap! I think you have set some very nice goals, and will be looking closely at your venture so I can learn as much as possible! 

  • Professional · Cleveland, OH · Member since 2015 · 11 posts · 7 votes
    10y

    We own 400 units but won't see $160k per month for years.  If you would like copies of our agreements send me a private message and best of luck!

  • Real Estate Broker · Virginia and Florida · Member since 2015 · 12 posts · 5 votes
    10y

    I have a 30 unit single family portfolio for sale in the Norfolk/ Virginia Beach area. Proximate the largest military base in the world.

    The 30 unit portfolio is comprised of 3 single family homes, 7 condos, 18 townhomes, and 1 duplex, totaling approximately 34k sq. ft. Each property has been professionally renovated and in very good condition.  Currently the portfolio is 100% occupied and cash flowing nicely.  There is approximately 500k in built in equity factoring the valuations of these assets on an individual basis.  We have priced the portfolio based on cash flow only, which boasts a healthy 9-10% leveraged cash on cash return year 1.  Please contact me for more info.

  • Rental Property Investor · Algona, IA · Member since 2015 · 43 posts · 33 votes
    10y

    I like your ambitious goals. You may wish to consider investing in property management software. Genesis2 by Yardi Systems is a good start for managing smaller sized multifamily properties. Voyager 7 also offers more robust features (tenant screening, online rent payments, facilities management, energy solutions, etc.) - many of these add on features will help automate your properties and free up the property manager to be more available to tenants.

  • Professional · Los Angeles, CA · Member since 2015 · 80 posts · 6 votes
    10y

    @Chris Shepard10x rule by Grant Cardone!!!!!

    I think that @Michael Quarles can chime in on your direct mail here! He is THE GUY on marketing

    Congrats on all your success and wish you the best in your endeavors!

  • Investor · Thousand Oaks, CA · Member since 2012 · 176 posts · 47 votes
    10y
    Originally posted by @Chris Shepard:

    Made another offer that I will syndicate to some friends on a 5 plex on 4 lots today as well.  Lots of stuff going on. 

    I've got an excel question.  How does everyone format the names on their lists for mailing?

    I have tons of businesses, trusts, and individuals I want to mail, but their names are all not perfect and ready to mail.  There's about 1500 people on the list... Is it really worth it to go through each one personally?  Do you guys outsource?  Does anyone have a program that does it automatically?

    I'd try using the =CONCATENATE formula to combine cells, then use " " or ", " as spaces or commas. 

    For example: =CONCATENATE(Q2," ",W2,V2,", ",R2,", ",S2, " ",T2) where Q2 would be the site address, and W2 and V2 would be suite or Apartment number, R2 would be city.

    There are other formulas you can use to deconstruct a cell such as =find and =search, and =mid, and =right in some combination, but that's going to get really complicated. 

  • Investor · Nashville, TN · Member since 2011 · 26 posts · 9 votes
    10y

    Sounds like a fantastic goal, looking forward to updates! 

  • Mike DaveyPro Member
    Investor · Stockton, CA · Member since 2014 · 15 posts · 4 votes
    10y

    Go big or go home at its finest!

    Good luck and go for it all the way

  • Investor · Rochester, WA · Member since 2013 · 221 posts · 30 votes
    10y

    Following, you guys have a lot going on and hefty goals. Love it, good luck!

  • Homeowner · Chicago Heights, IL · Member since 2014 · 105 posts · 8 votes
    10y

    Good luck with your goal. I will be following this one!!

  • Investor · Seattle, WA · Member since 2013 · 68 posts · 16 votes
    10y

    Love it! Keep us updated.

  • Rental Property Investor · Malvern, PA · Member since 2015 · 82 posts · 28 votes
    10y

    Really impressed by your goal! Sounds like you have the experience to really make it happen, but it'll still be a challenge. I'm looking forward to hearing what progress you make. I'm just starting out now, and hoping to acquire 8 properties a year. Your post is a good reminder to be much more clear in goal-setting -- thanks :)

  • Jim GenisPro Member
    Investor · Olathe, KS · Member since 2014 · 88 posts · 58 votes
    10y

    @Chris Shepard,

    Congrats on taking this big step and laying it out there. A few thoughts:

    • Include in your networking potential private investors. You may need to syndicate (pool) the investment funds which has very specific guidelines. The downside is the upfront work (using an attorney, of course) but the upside is a greater pool of capital to fund purchases.
    • I would recommend leverage (loans) where it makes sense. Apartments have always been a favored class in commercial real estate and you should have plenty of options. Bridge loans are great for turnaround deals in particular, followed by permanent loans. Send me a private message as I may be able to help with some advice about what lenders look for and/or make connections for you.
    • I agree with the previous post that TV does not make sense.
    • Networking is your best bet. When you do, be sure to tell everyone that they should keep their eyes open for signs of distress: poorly maintained properties, peeling paint, crumbling parking lots. Just have them send you the address of the property and have your title agent do a search -- this is how great rehab/repositioning deals can be found. This is also very attractive to sophisticated private investors because they can see the untapped value.

    Best of luck on your journey. I look forward to tracking your progress!

    Jim

  • Rental Property Investor · Los Angeles, CA · Member since 2010 · 804 posts · 230 votes
    10y

    Wow!  That is one helluva goal!  You can probably reach your goal of 400 units. So in order to get the $160k a month, each unit will net $400 a month on average.  With so much debt that will be require and capital expense that will be necessary, if this can be pull off you be the Bill Gates of BP.  It can be done since you have dreamed it.  Most goals do take longer because of unforeseen obstacles.  I am sure you you will accomplish a big portion of your goal.  Even if you don't hit the bull's eye, what a great achievement you will have accomplished and you will be crying all the way to the bank.  Cheers and drum roll please!  Thank you for setting your bar higher.  It will be an inspirations to many here.

  • Mike MoseePro Member
    Investor · Eagle Point, OR · Member since 2011 · 181 posts · 118 votes
    10y

    Have you considered mobile  home parks?   Seek out property managers for disgruntled owners.  

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