Trading W-2 for Self Management- 0-92 Units in 16 months!

Trading W-2 for Self Management- 0-92 Units in 16 months!

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

I hope to provide an informative account of how I was able to scale to 92 units in 16 months, leave my W-2 job and truly find my passion.

Back Story:

I am 33 years old, I am married with two young (1 and 3) children. My career before REI was as an IT project manager at an insurance company. I currently own 92 multi-family rental units in Omaha Nebraska, mostly with partners and self-manage. The portfolio consists of properties ranging in size from duplexes up to a 24 unit building.

Financing: I received my initial capital through a HELOC on my primary residence. All my properties are traditionally financed with 20-30% down on 15-25 year AMs that balloon between 5-10 years. I have also used hard money and private lenders as well.

What Started my obsession with REI:

I, like many of the individuals on BP was frustrated with the lack of freedom as well as minimal feeling of accomplishments through my 9-5 job. I had always known I wanted to do something entrepreneurial but had no idea what direction to proceed.

Before I go much further I want to highlight some of the effects of beginning your investing career:

  • 1.People will doubt you and think you are crazy. They will say Real Estate is risky, they will say you have a great job, they will ask are you worried about plunging toilets at midnight. Be respectful to these people but do not internalize their words. Soon enough they will see your success and want to emulate your actions.
  • 2.You will have to sacrifice a lot of your fun time. No more lazy Sundays or lunches with your complaining coworkers.. you have work to do.
  • 3.Your sacrifices will affect your family, you will be on your phone more, likely you will now be working your full-time job and investing “job”. This is the harsh reality (at least for me) to get where you want to be. It is vital to surround yourself with a strong support system.
  • 4.You will become very aware of your goals and that most individuals do not have goals further than next week. This is ok, focus on yourself but give conscious effort to help others.

January 1st 2017: off of friends recommendation I picked up “Rich Dad Poor Dad”. I finished the book within two days and immediately realized my idea of wealth building was completely backwards.

In 2017 I had zero debt, a good job and was leveraging my 401k… I have traded that philosophy to acquire large amounts of debt, no 401k or IRA contributions and now have the freedom to control my own financial destiny.

Below are the steps I took to remove myself from my W-2 (and 30 years of working for someone else) and obtain a career as a real estate investor:

Step 1 (Education): Read and listen to as many books and podcasts as possible. Below are the books I have read and/or listened to (real estate and business):

This is the most important step in your journey, you must be constantly educating yourself! If you don’t like to read, listen or educate yourself than unfortunately you will likely not find much success (although I am sure there are those out there that have succeeded without).

Rich Dad Poor Dad, Millionaire Real Estate Investor, Multi- Family Millions (Dave Lindahl), ABC’s of Real Estate Investing, The Book on Rental Property Investing, Hold, The Advanced Guide to Real Estate Investing, The Due Diligence Handbook for Commercial Real Estate, Millionaire Real Estate Agent, The Book on Managing Rental Properties (Brandon Turner), The Emyth Revistited

Crushing It in Apartments and Commercial Real Estate, Emerging Real Estate Markets ,The ABC’s of Property Management, Wheelbarrow Profits, The One Thing, Outliers, Start with Why, David and Goliath, Chasing Excellence, Extreme Ownership, The Compound Effect, The Entrepreneur Roller Coaster, Be Obsessed or Be Average, The 10x Rule, The Obstacle is the Way, Ego is the Enemy, Am I Being Too Subtle, 48 Laws of Power, Atlas Shrugged, Man’s Search For Meaning, Sapiens, Tools of Titans, Four Hour Work Week.

Step 2 (financing): To get a better idea of what I was capable of purchasing, I met with four different lenders and began a relationship to acquire funding. I decided to open a HELOC on my primary residence, this allowed me to have access to capital if I came across an available deal.

***How did I choose the lenders? I choose a larger bank (better rates), two local banks (less restrictions, and one in which I already banked.

Step 3 (network with everyone): During my lunch breaks at work and in between changing diapers I would call/text anyone I knew or didn’t know to discuss real estate. Friends, brokers, lenders, attorneys. Anyone who either had a relationship to investing or was a person I looked up to based on their successes.

Find everyone in your network that is smarter than you and begin networking and explaining your goals. They likely know other smart people and those smart people will know someone who invests in real estate (Because smart people invest in real estate… just like A=B B=C A=C)!

*****I can't underscore how important networking is, I was able to link up with an experienced first partner who helped (and still helps) guide me through REI.

Step 4 (analyze deals and market): Analyzing multiple deals everyday as well as market rents for the areas I was targeting. I regularly searched through Zillow, realtor.com, Loopnet and Trulia. I used these sites to find properties for sale, current rents, as and look over previously sold properties.

Step 5 (leads): Immediately I realized that going about finding a deal through Zillow was nearly impossible and that brokers are not incredibly willing to spend time handing off deals to a newbie. So…. What did I do?

  • 1.Started posting on Biggerpockets (I received my first deal through a BP real estate agent)!
  • 2.Downloaded a list of multi family owners from Listsource.com
  • 3.After receiving the list I searched for phone numbers and began looking up every property (assessors website and Zillow) and becoming familiar with the neighborhoods. I would also walk the neighborhoods and properties over my lunch break and on my drive to and from work. (this is before I made a call or sent out any letters).
  • 4.Once I had a decent understanding of my criteria I began hand writing letters (191 to be exact) and calling the phone numbers I was able to gather online.
  • *****This was the catalyst to me finding deals and launching my career***** I was able to do six deals from that initial list.

Step 6 (start networking group): After attending the local REIA a few times and receiving a lot of value I realized that starting another group would bring at least twice the value. With the help of my partner I began a networking group which now in less than a year has over 200 members and regular attendance of 40+ individuals a meeting.

Property Management:

When I initially began learning about the power of real estate and passive income I assumed I would also be a passive investor and reap the benefits of financial freedom. Quickly I realized that if I were to take the passive approach my goals of quitting my W-2 would be extremely delayed (also I would be putting my life savings into another person’s hands). I realized that property management, although a job in itself, would allow me to control my career and financial freedom.

Caveat: Property management is Very demanding. Do NOT manage your own properties if:

  • 1.You are not a people person.
  • 2.You do not like talking on the phone.
  • 3.You dislike working weekends (or any hour of the day outside of 9-5).
  • 4.You do not want a second job. This is NOT passive, it requires you to create systems and deal with all the complexities that a business entails.

Reasons to manage your own properties:

  • 1.You are an effective manager and for the most part enjoy people.
  • 2.You want to reduce vacancy and expenses (after the property has been repaired my vacancy rate is below 2%).
  • 3.You want to start your own business and instill a certain “culture” at your properties. I focus heavily on customer service, I am not a pushover but try to go above and beyond as far as customer satisfaction.
  • 4.It keeps you very in tune with your investments, which may be the key to your success.

Thanks for reading and if you would like to talk please reach out through BP or any other channels! I would love to connect with more individuals and discuss Real Estate!

281Reply
2,472 views

Most Popular Reply

Investor · Omaha, NE · Member since 2016 · 33 posts · 26 votes
8y

@Collin Schwartz forgot one large detail that has been taking up a good portion of his time the last year and a half - giving back!  Thanks for being a mentor, for always being open to provide advice, and for starting up and managing the meetup.  Appreciate it buddy!

See this reply in the discussion

377 Replies

Jump to latestLatest
  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Anthony Cettina thanks for reading. I wish you the best of luck on your journey!

  • Lynnwood, WA · Member since 2018 · 7 posts · 0 votes
    8y

    Nice work Collin!  You are an inspiration.  I am a newbie from Seattle and just bought a Triplex.  I am looking for inspiration to help me along the path.  Great list of readings!  I sure will have to dig in to some of those. Keep it up!

  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Jonathan D. great goals, make sure you combine action and education everyday! Best of luck.

  • Windham, NH · Member since 2017 · 10 posts · 6 votes
    8y

    Fantastic breakdown and detail @Collin Schwartz ! Thank you for providing an excellent and informative list of how you do it and what has worked for you. Keep dominating!!

  • Rental Property Investor · Warsaw, IN · Member since 2017 · 33 posts · 33 votes
    8y

    I'm inspired! Way to take massive action, Collin! To your success!

  • Realtor · Kearney, NE · Member since 2015 · 23 posts · 11 votes
    8y

    I couldn't be happier for you Collin!  Outstanding mindset & advice! I invest in Kearney, but might have to make my way to one of your meet ups someday!  Keep crushing it.

    Ryan Ohri

  • Dallas, TX · Member since 2018 · 8 posts · 2 votes
    8y

    Awesome article. Thank you.

  • Member since 2018 · 4 posts · 0 votes
    8y

    Great read, very helpful. Thank you.

  • Investor · San Diego, CA · Member since 2015 · 290 posts · 80 votes
    8y

    @Collin Schwartz Awesome story! Do you have any tips how you obtained the phone numbers online from the MF property list you got from Listsource? Also, how was that first property through BP even a deal? 

  • Realtor · Sacramento, CA · Member since 2015 · 70 posts · 34 votes
    8y
    @Collin Schwartz... Excellant job and excellant post highlighting specifically what worked for you and how you went about doing it. So many of us are just getting started and posts/articles like this help develop our own personal roadmaps to achieve our own vision of freedom. Thank you for sharing.
  • Real Estate Consultant · Cleveland, OH · Member since 2016 · 511 posts · 345 votes
    8y

    Awesome story and so inspiring. I was laid off from my W-2 job last year and it really set me back. I am now back in the saddle and reading this is just what I needed to inspire me to try again!

    Thanks Collin!

  • MD · Member since 2018 · 36 posts · 2 votes
    8y

    Thanks for sharing your insights.  I too just gave up my W-2...you've started 20 years ahead of me though. :-)  Continued success!

  • East Texas · Member since 2018 · 206 posts · 138 votes
    8y

    Truly inspiring story giving me great hope of leaving my w-2 some day! As asked before, how did you manage to find the HELOC? The banks I have spoken with all want to do Home Equity Loans in lump sums with refinancing and a much higher percentage that what I originally signed on at.

  • Columbus, OH · Member since 2017 · 48 posts · 43 votes
    8y

    would like to connect as I am on the same journey

  • Windsor Mill, MD · Member since 2017 · 2 posts · 0 votes
    8y

    Collin,

    As someone who is looking to get to started as a newbie in REI, specifically small multi-family properties here in Baltimore, I am encouraged by your story and experience.

    Thanks for sharing!

  • Grove City, OH · Member since 2017 · 27 posts · 8 votes
    8y

    I love this! Thanks for sharing! It's very inspiring! We have our first duplex in contract now but the dream would be for my partner and I to leave our W-2 too!

  • Member since 2018 · 16 posts · 8 votes
    8y

    Colin: Thanks for the inspiration. I'm ready to jump back into the market again and leave the 9-5 JOB behind. I've been using my 3 & 6-year-old as an excuse too long now to stay in my comfy salaried box.

  • Realtor/ Property Manager · Fort Worth, TX · Member since 2017 · 57 posts · 24 votes
    8y

    Great job man! Get this guy on the podcast. 

  • Rental Property Investor · Carteret, NJ · Member since 2018 · 17 posts · 7 votes
    8y
    @Collin Schwartz thank you so much for posting as this is extremely helpful. I also wonder how did you finish a book like Rick dad poor dad in just 2 days. I need to learn those skills because books give you thorough knowledge. :)
  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y
    Aarron Light absolutely man. It’s difficult with little ones but that was my driving factor. I can say that I was not present for almost an entire year with my kiddos... but I can now take them to school, take off a wednesday and make it a zoo day as well as many other cool perks. While I type this I am not being present with my kids but speaking with other investors is also important and can help fuel the “bigger cause” of financial freedom, aspirations and other goals I have. The sacrifices are not simple and they hurt, but for me, have been well worth it. Best of luck!
  • Jackson, NJ · Member since 2017 · 7 posts · 3 votes
    8y

    WheRE did you have your meetups when you first started the group?

  • Houston, TX · Member since 2015 · 11 posts · 5 votes
    8y

    @Collin Schwartz thanks for sharing very movational, newbie out of  Houston TX this inspire me to go harder keep up the good work.

  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Harpreet Singh Have you started reading Rich dad poor Dad? It is a very easy but influential (life changing) read. Thank you for reading and PM if you would like to connect!

  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Sitaram Koppaka thank you for reaching out earlier! You are doing absolutely amazing things in the REI sector. Talk to you soon!

  • Real Estate Investor · La Plata, MD · Member since 2017 · 128 posts · 18 votes
    8y

    Very inspiring

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