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

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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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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!!

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  • Maria Mansilla
    Real Estate Agent · Richmond, TX · Member since 2016 · 2 posts · 2 votes
    9y

    I have credit score 800+ and my income is low now since I am self employed.

    Having about 70K savings, how can I fund a multifamily investment?

    Thank you for your help!

    2Reply
  • Brian Egr
    Flipper/Rehabber · Lincoln, NE · Member since 2016 · 144 posts · 71 votes
    9y

    Congratulations, hard work pays off!

    2Reply
  • Taija Walkowiak
    Investor · Lincoln, NE · Member since 2017 · 24 posts · 23 votes
    9y
    Wow great story!! Keep up the great work and post another update sometime too! Question for you though, how did you find these properties? Were they actually for sale, did you know someone, or did you use a list service to find the properties/owners? I have a couple single family properties now and I am looking to jump into the multi family properties in Lincoln!
    2Reply
  • Collin Schwartz
    OP
    Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    9y
    Originally posted by @Collin Schwartz:

    @Ray Lai

    Eight units were MLS (2 deals), six units direct mail/cold calling (3 deals), and eleven units (1 deal) were brought directly to me from my partner as an off market deals. I actually pulled a list from listsource and targeted my ideal market. I then got phone numbers from zabasearch.

     @Taija Walkowiak this is a previous post in this thread. Best of luck! What size of multi family properties are you looking for? Hows the market in Lincoln?

    1Reply
  • Craig StasnburyPro Member
    Papillion, NE · Member since 2016 · 12 posts · 6 votes
    9y

    Collin,

    Fantastic job! It is a very inspiring story especially during the "hot market" that a lot of people claim Omaha is right now. I am working on my first property as well and I hope to quickly follow in your footsteps for rapid property acquisition! 

    2Reply
  • Erica M Chambers
    Philadelphia, PA · Member since 2017 · 26 posts · 11 votes
    9y

    WOW.  This is great!  Very inspiring. Wishing you continued success!!!

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

    @Erica M Chambers thank you very much.  Best of luck to you and your investing aspirations!

    1Reply
  • Philip J. Russell
    Accountant · Sacramento, CA · Member since 2017 · 7 posts · 2 votes
    9y

    Collin-Best wishes for continued success.

    1Reply
  • Taija Walkowiak
    Investor · Lincoln, NE · Member since 2017 · 24 posts · 23 votes
    9y
    The market in Lincoln is similar to Omaha, its definitely a hot market but if you keep looking and jump fast at things deals are still out there. I am looking for anything from other single family properties - quad plex. I would be willing to go larger than a quad though too! So if you hear of anything in Lincoln please keep me in mind!
    0Reply
  • Collin Schwartz
    OP
    Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    9y

    @George Moehlenhoff I have not taken any distributions from the properties yet. Nearly all have required light to medium rehab and have vacancies to accommodate those rehabs.  My first property closed almost four months ago, April 24th so it has been a nonstop process of remodeling and raising rents. I hope to take distributions in six months but wouldn't be surprised if it was closer to a year as I build reserves and amend differed maintenance. What I do factor in is a 10% management fee for myself, that money will then be used for debt pay down. 

    Also since I am 100% leveraged on the properties, using a HELOC for my downpayment and mortgage there is no Cash on Cash returns as I have no out of pocket money. When I use a basis of 25% down my COC returns vary from 12.5% to 26% depending on the property.

    1Reply
  • Erik Peddle
    Investor · Denver, CO · Member since 2016 · 85 posts · 22 votes
    9y

    Inspiring action Collin!  I'm curious what kind of cash flow your getting from these?

    1Reply
  • Manuel Angeles
    Lender · Los Angeles, CA · Member since 2015 · 278 posts · 78 votes
    9y

    @Collin Schwartz Very Cool ! That is definitely inspiring. Aside from you line of credit, did you use any other sort of financing for these acquisitions ? Or were these units acquired entirely using the line of credit ?

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

    @Manuel Angeles I only used my LOC for the down payments and then traditional commercial lending for the rest. Currently my LOC is nearing its max so I will likely be looking for partners and possibly refinancing to pull out additional funds for future purchases. I also may consider using my IRA to fund additional purchases.

    I see that you are in the lending industry, what options do you see best suited for buy and hold value add investors?

    0Reply
  • Manuel Angeles
    Lender · Los Angeles, CA · Member since 2015 · 278 posts · 78 votes
    9y

    @Collin Schwartz Usually we do not lend on buy and holds, typically we send those to Sprout Mortgage or Lima One. They can give rates that are more geared to long term holds, in the 5-6% interest rate range. 

    At Sprout Mortgage, I work with Chuck Campbell. At Lima One, I work with Dalton Ellis

    All of the properties you're buying already stabilized ? or are you repositioning them like what Dave Lindahl does in MultiFamily Millions ?

    I am still working to acquire my first property. I live in Los Angeles California, so cash flow is not that good unless you go more into the more rural cities. but there are many opportunities for reposition and value-add plays here 

    2Reply
  • Ian Epps
    Real Estate Investor · Bloomfield, NJ · Member since 2015 · 9 posts · 2 votes
    9y
    Great story! Keep up the great work!
    1Reply
  • Eddie SalisburyPro Member
    Licensed Real Estate Broker · Albany, NY · Member since 2017 · 29 posts · 5 votes
    9y
    That's exactly what BP is here for. Congrats Colin.
    1Reply
  • Collin Schwartz
    OP
    Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    9y

    @Manuel Angeles only two of the properties were turn key, I only increased rents on those two. The rest of the properties have required repositioning. I hope to get in larger units in the near future but its been helpful to learn the repositioning process on smaller 2-5 units properties. Three of the properties I have purchased have been half to almost fully vacant, which has been beneficial for remodeling. Best of luck, in getting your first deal and thanks for the recommendations!

    0Reply
  • Patricia Joseph
    Realtor · Atlanta, GA · Member since 2015 · 97 posts · 31 votes
    9y

    Wow @Collin Schwartz! This is impressive--Congrats! I'm with you; it's scary to think that my life will end up like my coworkers just watching the clock; uugghh!

    1Reply
  • Todd J.
    Investor · Omaha, NE · Member since 2016 · 9 posts · 4 votes
    9y

    Well done Collin!  I'm a fellow investor in the Omaha area with 6 units.  Given that return is related to risk, would you mind sharing (in general) which parts of the metro you are investing in?  North O, Dundee, South O, midtown, etc?

    Thanks!

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

    @Todd J. I have 11 units in South Omaha, 12 units in Midtown (soon to be 16 units), and 2 units on 40th and Cummings. How about you, where are your units located? Are they SFR or Multi's?

    1Reply
  • Sebastian MarroquinPro Member
    Real Estate Agent · Pasadena, CA · Member since 2015 · 477 posts · 263 votes
    9y

    @Collin Schwartz hey collin: can you describe the prices for some of your most recent purchases: how many units: what are the costs: what is the cash flow etc? i'm interested and I'm sure more people are! congrats 

    1Reply
  • Nicolas Conca
    Rental Property Investor · Denton, TX · Member since 2017 · 51 posts · 17 votes
    9y

    I am very interested.

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

    @Sebastian Marroquin @Nicolas Conca

    I posted this info earlier in the thread but here you go!

    Below is a list of my properties and repair/rehab costs.
    3 plex, purchase price $260k - $10k (2 units light remodel- new carpet, paint, appliances etc) rents- $3250

    Duplex $155: $3k (roof patch, finish hardwood floors new fridge) plus capex of $5k for eventual new furnace. rents- $1800

    Duplex $100k: $20k (plumbing, one side medium cosmetic rehab, roof patching) rents-$2000

    11 plex (470k): $30k (roof, furnace, unit updates) rents - $7000

    5 plex $165k: $40k ( update all units, paint interior/exterior, porch, deck, hvac, roof) rents -$3200 (Owner pays utilities)

    Duplex $172k: $0 turn key but will keep $3-4k in case of large ticket item ac/hvac etc. rents- $1900 

    I am also closing on a 4plex next month $165k: $20k for updates rents: $3000

    All the above properties have room for rent growth but with being so highly leveraged I need to ensure mortgage and expenses are covered until I can stabilize.

    Many of the units and properties are being repositioned. I do however project an average of 13%-25% COC return if I was to assume a 20-25% down payment scenario. For all my properties I am 100% leveraged so there is no COC returns, they are just returns. I also pay myself a 10% management fee.

    2Reply
  • Todd J.
    Investor · Omaha, NE · Member since 2016 · 9 posts · 4 votes
    9y
    Originally posted by @Collin Schwartz:

    @Todd J. I have 11 units in South Omaha, 12 units in Midtown (soon to be 16 units), and 2 units on 40th and Cummings. How about you, where are your units located? Are they SFR or Multi's?

    A duplex south of 45th and Center and a 4 plex on 52nd and NW Radial Hwy. I stick to purpose built multifamily and am looking for 4 units or more per building. Have stayed away from a few areas that cash flow well based on risk management and am looking at direct mail and other pipelines to find properties. If cap rates keep compressing I may stop looking all together and wait until things normalize. Do you stick to purpose built multifamily as well or will you purchase conversions? Maybe I missed it in a previous post, however are you paying off your HELOC with earned income from your day job or is your bank allowing you to pull out equity from your investment property purchases with less than a year seasoning in order to pay it down?

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

    All my properties except for the Blackstone 5 unit is purpose built. I typically do not like conversions but the units in Blackstone at $38k a unit is a no brainer. The HELOC is being payed off through my personal income. Most likely in a couple years or sooner I will look to refinance multiple properties and the Heloc together. I have had ALOT of luck with direct mail!

    1Reply
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