0-25 units in four months and it all started with Bigger Pockets!

Real Estate Deal Analysis & Advice
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0-25 units in four months and it all started with Bigger Pockets!

Collin Schwartz
Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes

Its amazing that the morning of January 1st I knew nothing about real estate investing. Now after purchasing six deals with a seventh under contract I realize I have just scratched the surface and have much more to learn.

After reading Rich Dad Poor Dad on Jan 1st (and three days before my 32nd birthday) I had a realization… I needed to get my a** in gear, take calculated risks, and begin pursuing the lifestyle I have always dreamed of.

I started my real estate endeavor by reading numerous books including “Millionaire Real Estate Investor”, “The One Thing”, “Multi-Family Millions”, by David Lindahl, “Toddlers Are A**holes” (more on that later), all of Ken McElroy’s books and many more. I couldn’t get enough real estate insight by reading alone so I started consuming Bigger Pockets podcasts on my drives to work.

At the same time I took the advice of the books/podcasts I was reading and reached out to everyone smarter and more successful than me. That lead me to…. My wife’s, cousins, boyfriends, friends, friend….seriously! (I will include an ancestry chart in the appendix). This individual is now my mentor, business partner, and good friend.

First deal: 100% attributed to Bigger Pockets. Colton Luchsinger (great real estate agent!) reached out to me on BP and after some conversations he sent me a deal. Not having a clue what to do I reached out to my soon to be partner for his opinion (wifes, cousin, brothers, friend, etc.). On my own accord I would have said no to the property, being too fearful of the lackluster financials, he on the other hand saw an opportunity and he was correct. The property appraised at 20% over sales price and rents have been increased substantially after purchase.

Today I just closed on my 24th and 25th unit less than four months after my first deal.

I am so grateful and happy to be in the position I am in. The days since January 1st have taught me more about business and myself than nearly a lifetime of learning.

I hope to continue to connect with amazing individuals on BP and learn from others everyday!

(Below is a pic of 24 and 25.)

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Most Popular Reply

Roshan K.Pro Member
Oklahoma City, OK · Member since 2017 · 258 posts · 215 votes
9y

Congrats on your success!!

Can you talk about how you made financing happen? Most people can't afford downpayment on their first door, let alone 25 doors in 4 months!!

9Reply
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160 Replies

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  • Jerry Thompson
    Dallas, TX · Member since 2017 · 42 posts · 25 votes
    9y

    Incredible success story, to more amazing deals and decisions.. Cheers!

    2Reply
  • Christie Gahan
    Investor · Hillsboro, OR · Member since 2016 · 310 posts · 153 votes
    9y

    Wow!  Talk about taking massive action.  Congrats!  Just to be on the safe side, start building your "**** happens" money pile.

    1Reply
  • Kurt Traynor
    Investor · Moseley, VA · Member since 2015 · 145 posts · 60 votes
    9y
    Awesome story and congratulations on the new family!!!!!
    0Reply
  • Josh V.
    Excelsior, MN · Member since 2016 · 52 posts · 27 votes
    9y
    Collin Schwartz Congrats! Great story.
    0Reply
  • William S.
    Rental Property Investor · Overland Park, KS · Member since 2015 · 492 posts · 234 votes
    9y

    @Collin Schwartz I second @Hadar Orkibi

    Can you show detailed cash flow results of one of your deals using a LOC? I've checked rates and the interest is very high. Seems only good for BRRRR strategy.

    1Reply
  • Alex Olmo
    Specialist · Orlando, FL · Member since 2017 · 127 posts · 38 votes
    9y
    Awesome! Hope you can buy 25 more by 2018! Big goals
    1Reply
  • Collin Schwartz
    OP
    Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    9y

    Here is an example of my third property I purchased (duplex) I am choosing this one as the price was $100k and makes for easier math:

    Purchase Price: $100,000

    Rehab cost: $19,500 (remodeled one unit, roof patching, finished flooring in both units)

    Closing Costs: $4,340

    All financing (Mortgage and LOC) amortized over 20 yrs (4.75% int rate): $801.32

    Vacancy: 5%

    Repair: 10%

    capex: 5%

    Management (I pay this to myself): 10%

    Taxes: $2,937

    Insurance: $1,300

    Cap Rate: 10.81

    Yearly Cash Flow: $3,787

    Principal Paydown: $3,808

    2Reply
  • Collin Schwartz
    OP
    Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    9y

    Forgot the most important item.. Monthly rent $2100 for both units.

    2Reply
  • Kory Denny
    Inspector · Raleigh, NC · Member since 2017 · 55 posts · 25 votes
    9y
    Inspired! Congrats and good job!
    1Reply
  • Medina Norris
    Columbus, OH · Member since 2017 · 12 posts · 2 votes
    9y

    Congratulations on your success.I am a beginner at this, but eager to get started and seeing progress. Bottom line I don't know how to begin, what's the best option for funding. Help me!

    0Reply
  • William S.
    Rental Property Investor · Overland Park, KS · Member since 2015 · 492 posts · 234 votes
    9y

    I see so HELOC not unsecured LOC. Big difference in interest.

    2Reply
  • William S.
    Rental Property Investor · Overland Park, KS · Member since 2015 · 492 posts · 234 votes
    9y

    @Collin Schwartz

    So your primary homes value must have gone up a lot to get the HELOC $ amount? I'm interested in the financing method here. Several people on BP have been using HELOCs/LOCs, etc to grow fast but don't go into details on the how.

    2Reply
  • Majour Bey
    Real Estate Professional · Budd Lake, NJ · Member since 2016 · 11 posts · 5 votes
    9y

    This is awesome. Congratulations. Thank you for sharing

    1Reply
  • Ann Bellamy
    Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
    9y

    Congratulations, @Collin Schwartz, nice job.  I'm going to go a little against the grain here, since you haven't been through a downturn.  And since I always look at worst case scenario.  And since sometimes worst case happens, like in the last downturn.  Actually, worse than worst case also happens.

    Pull out your documents for your HELOC and read thoroughly, paying particular attention to the part where they tell you they can freeze the line or call it.

    Why would they do that? During the last downturn, BofA froze my HELOC simply because of the city I live in. I had and still have an 800 FICO. They also call lines when they no longer want to be in the business of "", be the reason economic changes or regulatory requirements. And that will happen at the worst possible time, guaranteed.

    If they freeze it and you have the money in use, no biggie unless you were about to use it for a purchase or for a cap ex item, or for just paying bills in case you had a sudden drop in occupancy. (Hint, not all downturns cause increases in rental demand)

    If they call it, on the other hand, because of reasons totally outside your control, you will have to replace it with funds from somewhere else. If you think you will simply get a HELOC from another bank, think again. If one bank is scaling back, it's a good bet they are all panicking.

    So plan for another source of funds, like your own cash reserve, or replace those HELOC funds with private investor funds.

    I don't mean to rain on your parade, simply to point out that having an umbrella handy might be prudent.

    8Reply
  • Tristan S.
    Rental Property Investor · Boone, NC · Member since 2015 · 291 posts · 88 votes
    9y
    Collin Schwartz amazing success story! That's very impressive! Keep up the good work!
    1Reply
  • Bill Goodland
    Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes
    9y
    Congrats and great job! Looks like you must have a lot of equity or ability to pull significant amounts from your LOC. Can you elaborate a bit more on that? And without significant track record, did the bank have any issue with using the LOC as the downpayment on the loans? Is this where the partner helped? Did you use the same bank for everything? Thanks in advance.
    2Reply
  • Cody Z.
    Real Estate Agent · Belmar, NJ · Member since 2017 · 370 posts · 200 votes
    9y

    @Collin Schwartz Congrats on your success thus far! What was your criteria for your deals? What would you consider the most important first steps to be?

    Good luck with your adventures going forward!

    1Reply
  • Collin Schwartz
    OP
    Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    9y
    Ann Bellamy I appreciate you going against the grain! As the saying goes everyone is a genius in a bull market. I do believe that you are correct and that the bank does have provisions to call the HELOC if necessary. One thing I do is to only purchase properties that I can immediately add 20% to its current value through raising of rents, reduction of expenses or repurposing. My current cash reserves are in stocks that perform on average 8% while my HELOC's interest is only 4.75%. That allows for a spread of over 3% thus making the HELOC a better tool for funding downpayments. Also withdrawing funds from stocks result is capital gains taxes. I do realize that regardless of what I do real estate investing is risky and there will be situations in the future that are out of my immediate control. Thanks for the great advice!
    4Reply
  • Collin Schwartz
    OP
    Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    9y
    Cody Zucker the necessary criteria for me to pursue a deal is: 1. Location - must be in a promising area of town that lies within the path of progress. Also in a close enough vicinity to work or home so I can manage effectively. 2. Value add - I look for properties whose rents are too low and or can use some rehab. I would suggest learning as much as possible. I start everyday listening to real estate podcasts and read before I go to bed. That helps me stay focused 24-7 on my goals. Also be comfortable with the numbers and doing analysis. I am not going to lie its been scary, difficult and I have only just begun. But what scares me more is ending up like my coworkers and watching the clock for 40+ years of my life. Best of luck!
    7Reply
  • Annette D.
    Investor · Los Angeles , CA · Member since 2017 · 4 posts · 1 vote
    9y

    Congrats!!

    1Reply
  • Chris Berg
    Bloomington, IN · Member since 2017 · 16 posts · 2 votes
    9y
    Colin, can you share a brief breakdown of some purchase prices to ARV to assessed value. I'd like to see what a realistic assessment looks like after repairs. This is how you paid back your LOCs, right? Last, are you using a LOC for down payment and rehab? Well Done
    0Reply
  • Leah Fisher
    Real Estate Agent · Columbia, SC · Member since 2017 · 11 posts · 1 vote
    9y

    Congratulations.  I'm an agent that helps people find deals as well.

    1Reply
  • Hadar OrkibiPro Member
    Rental Property Investor · USA / NZ · Member since 2016 · 1k+ posts · 812 votes
    9y

    So Lets look at the numbers ON THIS 100K @Collin Schwartz, (it would have been easier to put it in the BP calculator when a complete picture is given. )

    Cost including rehab and closing: $123,840 (100% finance) 

    Yearly Rent/Income: $25,200

    - Subtract Yearly OPEX:

    Monthly Finance Costs: $801.32 x 12 months = $9615.64

    - Vacancy 5% OF $25,200 = $1,260

    - Rapiers 10% - $2520

    - Capex: 5% - $1260

    - Management 10% - $2520

    - Taxes - $2937 

    - insurance -  $1300

    Total Of Operating Expenses: $21,412.64.

    $25,200 - $21,412.64 $3,787.36 Net Cash flow.

    That's infinite return as you have no money down.

    BTW this is more then "2% return" deal. 

    Well done!

    4Reply
  • Baudelio Perea
    Milwaukee, WI · Member since 2017 · 3 posts · 1 vote
    9y

    Congrats on the great success  @collin Schwartz, for a newbie in real estate like myself, its very inspiring. Would you mind showing some numbers and financing on maybe your first or most current deal??  Lately ive been into running numbers on different multi families in my area and checking out other peoples successful deals definitely helps.

    1Reply
  • Brady Carpenter
    Seymour, IN · Member since 2017 · 18 posts · 6 votes
    9y
    My goodness, what an inspirational story. Congrats man! I'm hoping to land my first deal asap but am too scared still. Trying to find a mentor/partner has been a little rough but I know my anxiety will be kicked to the curb once I find that mentor. Good luck with your future endeavors!
    1Reply
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