Closing on my 151st unit in less than 24 months!

Real Estate Deal Analysis & Advice
8yFollow

Closing on my 151st unit in less than 24 months!

Daniel Toshner
Investor · Seattle, WA · Member since 2015 · 91 posts · 111 votes

BP!

I would have never been able to do it without the BP community!  I will be closing on my 151st unit in less than 24 months.  If you told me I would have more than a 100 units when I first started looking into real estate I would have told you that you are crazy.  The more I listened to the podcast the more my belief grew.  I just kept thinking "if this person can do it then so can I!" I'm only 32 years old and feel like I am just getting started.

Anyway, I wanted to thank @Joshua D. and @Brandon Turner for creating an environment  for people like me that started from nothing to be able to move into this type of lifestyle and create passive income. The reason I started was to replace my wife's income so she could stay home with my two boys but now my whole household income has been replaced and I can continue to save my earnings for future deals and pay down debt.  

Also I wanted to thank @Sean Tarpenning and @Account Closed for being such a great resource and partner with me.  USREEB has really been like a separate family for me.  I really wish I could make the holiday party but I have my family in town for our own! Ha.  If you haven't checked them out it is a great turn key provider that can start people out right, which is exactly what it did for me!  

People always ask me, What should I do?  When should I do?  How should I do?  I always say, "In-desicion creates more loss than decision will ever."  Meaning, what was my secret to scaling so quickly?  It was just jumping in head first into it.  I knew mistakes would come and I knew failures would come but I didn't care because I saw all the wealthy individuals I knew with real estate portfolios.  I wasn't handed "a small loan of a million dollars" like our POTUS so I had to scrape and claw to get where I am today.  It sounds corny but just know where you want to get and be relentless until you get there. I've learned there is always a way if you want to get it done but you have to be flexible and understand others points of view so you can meet in the middle.  Remember there is no deal if there is no agreement.  

My portfolio is a great accomplishment thus far but I am only getting started.  I will be at 500 units before 2020 and once I get to that I will create a new goal. I just wanted to share with everyone that I got my early Christmas present!

Feel free to ask any questions as I am an open book and will try to respond as quickly as possible!  Thanks again to everyone who has helped!

23Reply
136 views

Most Popular Reply

Colin Simon
Investor · Boulder, CO · Member since 2017 · 62 posts · 32 votes
8y

Daniel, that sounds amazing. Closing on 151 units in that period of time is impressive.

Forgive me, but the analytical side of my brain can't quite accept your magnitude of success. I have so many questions:
-As someone else asked: if you're partnered on some deals, how do you claim 151 units? If you own 50% of a unit, how do you count it? Do you just say "30% of this unit and 70% of that unit = 1 unit"?
-What were your biggest financing hurdles? To take on that many loans, you must have made some complex and/or creative deals. Did lenders really just give you the green light repeatedly?
-Whoever was underwriting those loans(after they did it for the 10th, 11th, 12th time for the same guy within 2 years) must have cocked an eyebrow once or twice. What sorts of questions did you get?
-You must be leveraged to a very high level. Even paying closing fees again and again and again sounds like a strain. Doing that in a short period of time presents risks if there's even a market correction, much less a recession. Are you not afraid of that at all, and do you not see enormous risk in attempting to scale straight towards 500 units? 
-Building on the last question: wouldn't you rather let the whole "cash flow recycling" program run its course? It seems to me that with 151 units, with many of them cash flowing, you would have a powerful "velocity" of money with which to pay off at least a couple of loans, lower LTV's, and really entrench your position. Why wouldn't you take that path?


I'm still a newbie, let me know if my assumptions here are off-base. Thanks for your time :) and congratulations again. Quite the accomplishment.

7Reply
See this reply in the discussion

76 Replies

Jump to latestLatest
  • Chase Gochnauer
    Investor · Des Moines, IA · Member since 2015 · 380 posts · 201 votes
    8y

    Daniel, congratulations! I thought I was reading an article about myself! I'm also 32 and in about 1.5 weeks will be closing on #135 in almost exactly 2 years as well! It's stressful, but exciting. I'm anxious to see what 2018 will bring. 

    1Reply
  • Daniel F. Harb
    ARRT, RT(R) / Rental Property Investor · Newport Beach, CA · Member since 2017 · 360 posts · 242 votes
    8y

    Congratulations, Chase Gochnauer!  Please forgive me, but how in the heck did you do that?!?!

    That is  Crazy~Amazing!!!

    Give us a synopsis of how you accomplished the bulk of it, please... Or write a book, I'll be your first customer!  :)

    Wow, good for you!

    ~Daniel F. Harb!

    0Reply
  • Matt K.
    Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
    8y
    Originally posted by @Daniel F. Harb:

    Congratulations, Chase Gochnauer!  Please forgive me, but how in the heck did you do that?!?!

    That is  Crazy~Amazing!!!

    Give us a synopsis of how you accomplished the bulk of it, please... Or write a book, I'll be your first customer!  :)

    Wow, good for you!

    ~Daniel F. Harb!

     Step 1: Buy properties in a market prior to it going up in price
    Step 2: Sell/cash out those
    Step 3: 1031
    Step 4: Find people with more money then you

    Step 5: Convince them to let you use it
    Step 6: Buy MFH properties/portfolios 

    Repeat until you run out of deals and or money (or people willing to give you money).

    I'll send you a paypal invoice shortly (LOL)

    5Reply
  • Daniel F. Harb
    ARRT, RT(R) / Rental Property Investor · Newport Beach, CA · Member since 2017 · 360 posts · 242 votes
    8y

    Ha! Thanks, Matt K! Appreciate the overview. Nice bullet points.

    Where should I send the check?  :)

    ~Daniel 

    1Reply
  • Account Closed
    Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes
    8y

    Well I think this is great and boo to the haters. Was watching tv the other day and a news article referenced a company that had 70,000 units. Maybe that will be you someday. I've been shooting for 50, had 2 and now have 1, but hope to have 4 to 6 this year. Maybe my goals are too low!!! Congrats. 

    2Reply
  • Henri Meli
    Investor · Morrisville, NC · Member since 2012 · 1k+ posts · 673 votes
    8y

    Congratulations @Daniel Toshner . This is amazing what you just accomplished. I have no doubt that what you did is absolutely possible. Like you said, one has to be willing to act quickly , understanding that there could be some risk ahead. Sometimes, we get too caught up in analysis paralysis, expecting the perfect numbers before we close the deal. While expecting those, we end up missing out ... etc. I know that one of my main goals for 2018 is to be a little more ambitious and not let a deal die, because of a too narrow margin of error. I need to become more creative to make things work on the back end of the deal. You definitely raised the bar for me. 

    0Reply
  • Jenelle H.
    TX · Member since 2017 · 70 posts · 38 votes
    8y

    Seriously, how do you do this?

    #Goals

    1Reply
  • Account Closed
    Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes
    8y

    This one made me lose sleep, in the good way. I have been thinking about this story since yesterday and now have woken up early, after dreaming intensely about rehabbing a house (some wild stuff got built in that one), and cant get back to sleep - LOL. My original goal was (is) 50 units by retirement. I read this and wonder if my goal should be 50 units by next year, which is still 50% less than what happened in this example. Bravo again and thanks for the inspiring success story. 

    1Reply
  • Chase Gochnauer
    Investor · Des Moines, IA · Member since 2015 · 380 posts · 201 votes
    8y
    @Daniel F. Harb I'll be honest I was in a unique position of having a good cash flowing business to help the growth accelerate much quicker than it would have otherwise. I think partners or private investors could accomplish the same task but would take longer. I essentially did the BRRR method on steroids, 2-3 houses a month by purchasing at the sheriff sale or just listed REOs. I would buy cash, rehab and refinance which would allow me to get majority of my cash investment back out. I had probably 6 houses going at any given time. I also did this on a small office complex. This allowed me to be in a position to move forward on a 72 unit apartment which I just received commitment letter on, we close the first week of January. As far as the market goes, my first 5-6 I would say were exceptional deals as the market was still recovering but since then, I really didn't get any special deals due to market conditions. As far as leverage goes, no doubt the higher leverage the higher the risk, but it's no question that higher leverage generates higher margins. When you can get bank money in the 4s, it's a no brainier to make a return on that cheap of money. There is the risk of the market crashing, but I feel safe at the 75-80% I'm at on my properties.
    1Reply
  • Chase Gochnauer
    Investor · Des Moines, IA · Member since 2015 · 380 posts · 201 votes
    8y
    @Colin Simon I can't speak for Daniel but in regards to your comment about the 10th, 11th, 12th loans and someone raising an eyebrow, it's honestly the other way around. Once I could show that my model works, and I had 5 or 10 under my belt, and took bankers to see some of the properties, it gets easier not harder. it eventually gets to the point that's it's not even a question on whether or not you can get the loan. You want to use local banks for this type of volume and they have weekly board meetings that approve most of the loans. This large complex I just received approval on was interesting as I was able to actually haggle terms to get the best deal as banks compete for business at that level.
    1Reply
  • Daniel F. Harb
    ARRT, RT(R) / Rental Property Investor · Newport Beach, CA · Member since 2017 · 360 posts · 242 votes
    8y

    Wow, Congrats, Chase G. Thank you for sharing the nuts and bolts of how you got to this point. Simply incredible!  I am going to put my nose to the grindstone and see how 2018 goes. Of course, I will have to balance and rethink working my 6 days a week in my hospitals. Not much time for anything else! 

    Awesome for you and your family and Merry Christmas!   

    ~Daniel F. Harb

    0Reply
  • Chase Gochnauer
    Investor · Des Moines, IA · Member since 2015 · 380 posts · 201 votes
    8y
    @Daniel F. Harb Yeah I plan on slowing down the first 6 months of next year just to make sure my large complex transition goes smooth. I may still do a house or two a month but I'm thinking that I'm really going to enjoy the larger complexes, but we'll see. Good luck to you for 2018!
    2Reply
  • Chase Gochnauer
    Investor · Des Moines, IA · Member since 2015 · 380 posts · 201 votes
    8y
    @Daniel F. Harb Yeah I plan on slowing down the first 6 months of next year just to make sure my large complex transition goes smooth. I may still do a house or two a month but I'm thinking that I'm really going to enjoy the larger complexes, but we'll see. Good luck to you for 2018!
    1Reply
  • Daniel F. Harb
    ARRT, RT(R) / Rental Property Investor · Newport Beach, CA · Member since 2017 · 360 posts · 242 votes
    8y

    Thank you so much, Chase! That is so great you have so much of RE investing down to a science.  :)

    Man, the real estate mogul you are! Excellent. 

    Cheers!

    1Reply
  • Vincent Pace
    Lender · Northbrook, IL · Member since 2014 · 198 posts · 50 votes
    8y

    Wow this is really inspirational! Congratulations I hope 2018 brings you further success!

    0Reply
  • Rodney Harris
    Rental Property Investor · Kansas City, KS · Member since 2016 · 114 posts · 57 votes
    8y

    Your killing it!!!! I’m inspired my man!!! Great job!!!!! This pumps me up!! What is your current cash flow? Are you trying to get to a certain amount of cash flow as well or just units? @Daniel Toshner

    0Reply
  • Billy Tran
    Fintech Entrepreneur · San Francisco, CA · Member since 2013 · 9 posts · 1 vote
    8y

    @Daniel Toshner: Congrats on your great success. Your story is very inspirational for other investors like myself. I have a question if you don't mind. I see that you used a flip and flip line from Anchor to acquire some of these properties. My understanding is that these loans are short term in nature, are you planning to sell these properties before maturity or you planning to roll them over into a long term debt facility?

    0Reply
  • Daniel Toshner
    OP
    Investor · Seattle, WA · Member since 2015 · 91 posts · 111 votes
    8y

    @Billy Tran ya you got it. Acquire at better price being able to close quick then refi into long term holds. 

    1Reply
  • Billy Tran
    Fintech Entrepreneur · San Francisco, CA · Member since 2013 · 9 posts · 1 vote
    8y

    @Daniel Toshner: I see, have you talked to lenders in your markets? I'm struggling with refinancing my portfolio in DFW. The local lenders only do 15-20 year amortization and rate is pretty high at 5.5-6%, the national lenders like B2R, CoreVest can do 30 year amortization and rate is even higher at 6.5-7%. At these rates and terms, my portfolio won't cash flow at 70% LTV and I can't do the BRRRR strategy even though the appraised values support it.

    0Reply
  • Daniel Toshner
    OP
    Investor · Seattle, WA · Member since 2015 · 91 posts · 111 votes
    8y

    @Billy Tran Yes I use US Bank on a lot of stuff. They are 25 yr am 75-80% ltv rates are 3.5-5.25% depending on terms you pick. Are these SFRs?

    0Reply
  • Billy Tran
    Fintech Entrepreneur · San Francisco, CA · Member since 2013 · 9 posts · 1 vote
    8y

    @Daniel Toshner: Yes, they're SFRs. US Bank can only do 4+ unit right? Who do u use for your SFR?

    0Reply
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    8y

    151 is quite a few, good job Daniel!

    Podcast Guest on Show #121
    0Reply
  • Chase Gochnauer
    Investor · Des Moines, IA · Member since 2015 · 380 posts · 201 votes
    8y
    Originally posted by @Billy Tran:

    @Daniel Toshner: Yes, they're SFRs. US Bank can only do 4+ unit right? Who do u use for your SFR?

     I use a two local banks for mine. 75-80% cash out refi, 20 year amortization, rates are 4.5% give or take a little. 0.5%-1% origination.

    0Reply
  • Daniel Toshner
    OP
    Investor · Seattle, WA · Member since 2015 · 91 posts · 111 votes
    8y

    @Billy Tran they can do SFRs in aportfolio. Looking at 25 year am zero origination, 3.5-5% depending on terms and credit. 75-80% ltv. Usually have to close all at once in Kim and not separate so much more advantageous for refi with leases in place and historical cash flow

    1Reply
  • Billy Tran
    Fintech Entrepreneur · San Francisco, CA · Member since 2013 · 9 posts · 1 vote
    8y

    @Daniel Toshner: Thank you so much for the info, let me get in touch with US Bank. I actually had a small apartment loan with them 3 years ago and the rate was very competitive, I was told they only do 4+ unit back then. It's awesome that they can do portfolio of SFRs now.

    @Chase Gochnauer: Would you mind sharing the 2 local lenders that you use? Thank you so much!

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free