0-38 units in 10 months using the BRRR strategy effectively

0-38 units in 10 months using the BRRR strategy effectively

Casey, IL · Member since 2017 · 175 posts · 308 votes

This is a brief overview of how I went from a family business employee (with 7 children), only earning 60k/yr, filing bankruptcy in early 2016, to someone who will be completely financially free 18 months after I purchased my 1st property May 15 2017.

I began my Real Estate Study in late 2015, I mostly read books. All the Rich Dad books (but they are full of motivation and mindset, but don't have any actual substance), I read and listened to many podcasts, while driving for my regular job, or while working on my "side gig" where I cut, split, and delivered firewood after work hours. The idea of financial independence when you are working that hard, is incredibly inspiring. So I listened, learned, and saved money. I saved money as much as I could out of my paycheck and saved all of my proceeds from my firewood sales. I found some great podcasts, Joe fairless has a good one, along with Rod Khalief, and BP had a great one. I found it eventually then realized BP had this great website. I found the BRRR method and I was hooked. I live in Rural Illinois and while few podcasts cover rural investing, the principles remain the same. So I began talking about it with friends and family, and when it became apparent that I knew what I was talking about. I had 2 people that wanted to start the biz with me. They both invested $20k each for 1/4 of the business and I kept 1/2 (400 shares) and 1 non-paying, voting share (so that I remained in control, of the final decisions). So now I "owed" my new business 28k dollars, but we had enough to get started.

We purchased a vacant 6 unit building that needed 4 units completely remodeled, and a large old house that we planned to convert into a Triplex. Even though we floundered for almost 6 weeks with a contractor that did horrible damage, We finally found the right guy, ended up finishing 25k over budget and tied up over half of our initial 52k we had to invest, with no way to BRRR out of that messup. Fron there on out, I found much better deals, a SFH that I bought at auction for 12k, it appraised for 40k, we refinanced it, put a 25k lien against it, and it rents for 650/month, pays it's mortgage, and cashflows. Plus we created 13k out of thin air. We also did this with one other house, and a 10 unit building. Altho the 10 unit refi is coming up in May/June. There were growing pains in learning how to use systems (we use "Rentec Direct"). There were growing pains in how to manage tenants, But, all in all, we've been very aggressive when we find a deal. I and my partner @John Hagen have learned a lot, been a little surprised by the speed of what we were able to do. I can say this, you can't do it alone. 

I built a great team. That started with my partner @John Hagen, but continued with my wife who works tirelessly for our rehab crew, which is also headed by our maintenance man, and he's been amazing. My mom (who is the other investor that owns 1/4 of the business) is more of a silent partner, but she has done some small loans from time to time to our business to help it get thru cash crunches that come with growing and rehabbing nearly every dilapidated unit we buy. But I am extremely proud of this team. We currently own 29 multi-family units and 2 SFH's (95% occupancy). We have 7 more multi-family under contract for April, and we are steaming forward. I am proof that even tho u may be middle class and have a lot of things going against you. You CAN DO THIS!!!!

*I "Dave Ramsey'd my budget, and "Robert Kiyosaki'd my investment mind.  You can too!!

83Reply
296 views

Most Popular Reply

Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y

@Michael Beeman  not to get totally off topic but what I see you did that is the key is you raised capital first.. we see so many we start with your post  I have no money I have this problem that problem. How do I make money at real estate because this is what I want to do as it will set me up and etc etc .

Well the first thing you do is figure out how to get capital.. either investors or work harder or your parents or inherit it or something.. but at some point NO money and real estate simply does not go together..  even if your doing the wholesale gig you need tools you need marketing you need a car etc etc it takes something.. NOT I am broke please help me.

See this reply in the discussion

108 Replies

Jump to latestLatest
  • Casey, IL · Member since 2017 · 175 posts · 308 votes
    8y

    @Gerard J.  Since that episode, I was encouraged to use "other people's money" and I have decided to do a small syndication, because a few people had reached out to me about partnering with us. So we have another 8 units under contract with our current 46, we'll be at 54.. And those 8 are going to return great for the investors and even tho we have to share the deal; we only spent 6500 out of pocket. 

  • Phillip LanierPro Member
    Uvalde, TX · Member since 2016 · 141 posts · 45 votes
    8y
    Originally posted by @Michael Beeman:

    I know many have asked for me to post when I was on a podcast sharing my story. Well I was on Rod Khlief's Multi-family podcast this week, and I'd love to have you guys check it out. It's up on Itunes and Sound Cloud. Or you can message me and I'll get you the link.  @John Van Uytven  @Nirmal Khanderia  @Phillip Lanier  @Gerard J.  @Monique Driver

     Amazing!!!!

    That is so exciting!  You are such an inspiration!  Thank you for sharing this.  I will definitely listen and share the podcast.

    You rock Michael!  

  • Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes
    6y

    @Michael Beeman As others have already mentioned, truly inspirational. Thanks for sharing and providing insight. Would love to hear where you and @John Hagen are at now. Did you hit your June 2019 goal? 

  • Casey, IL · Member since 2017 · 175 posts · 308 votes
    6y

    @Patrick Bavaro We have 136 units now, and a laundromat.  We also have another 9 units under contract that close on December 31st at seller's request.  Other than that, we're just working to upgrade units for better rents, we have some partners/investors hat are working with us as well. @Rohith Janga has partnered with me on quite a few ventures t It's been great!  We're full steam ahead.  Not bad for our first 2.5 years so far.

  • Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes
    6y

    @Michael Beeman I'll say! Congrats on making your dream become reality. I gotta say, I definitely got the itch I cant scratch after reading your story. I'm in the savings/capital raising phase right now with a goal of $30k to get started but am eager to secure my first deal. 

  • Casey, IL · Member since 2017 · 175 posts · 308 votes
    6y

    @Patrick Bavaro  You CAN DO IT!!!    Keep looking for deals, and reading and listening to podcasts all the time!!  You'll do well.  When I was saving money and listening to podcasts, and working my side hustle so I would have enough saved, I would go on all the Real Estate Listing sites and try to evaluate deals using the knowledge I was learning from the books.

  • Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
    6y

    I am having a hard time following your start-up cash posture.  You say the following:

    "I had 2 people that wanted to start the biz with me. They both invested $20k each for 1/4 of the business and I kept 1/2 (400 shares) and 1 non-paying, voting share (so that I remained in control, of the final decisions). So now I "owed" my new business 28k dollars, but we had enough to get started.

    We purchased a vacant 6 unit building that needed 4 units completely remodeled, and a large old house that we planned to convert into a Triplex. Even though we floundered for almost 6 weeks with a contractor that did horrible damage, We finally found the right guy, ended up finishing 25k over budget and tied up over half of our initial 52k we had to invest, with no way to BRRR out of that messup."

    I am not sure if you started with $80K ($20K times 4); $28K as indicated later in the same paragraph or $52K as indicated in the next paragraph).  Also, what did you put down on the 6 unit building and the old house?  

  • Jesse BurnettPro Member
    Member since 2022 · 2 posts · 0 votes
    4y

    I am in central Illinois looking for a mentor to help me.  Anyone interested?

Join the conversationCreate a free account to reply, vote on answers and follow this thread.